Analysts warn that the lack of rain has led to record prices for olive oils in Spain. They also say that an especially dry summer this year could result in even lower crop yields.
The price of olive oil has risen by almost 60% since June, to about EUR5,4 per kilogramme. This is due to a severe European drought that destroyed the olive crop across Europe last year.
Spain, which is the world’s largest producer of olive oil, was particularly affected. Spain’s farmers produce about half the world’s supply of olive oil. However, in the last 12 months, the annual supplies have been roughly halved.
Vito Martinelli is a grains and oilseeds expert at Rabobank. “In my 20 years of experience in this industry, I’ve never seen prices like these”, he said. The crop in Italy and Spain “were also bad” last year, as was the case in other Mediterranean countries.
The Italian data analysis company Centro Studi Divulga said that 2022 was the driest year for Italy since 1800.Spain’s prolonged drought is putting a damper on the prospects of a rebound in production this year. According to Spain’s national meteorological agency, last month was the second-warmest and second-driest March in the century.
April will be the driest ever recorded. Spanish weather forecaster said this week that “not a drop” of rainfall fell in more than half the country during the first 17 of April. Rainfall is 23 percent below normal since October’s start of hydrological year.
Prices could be elevated if the summer weather is unusually dry. Kyle Holland, an oilseeds analyst at Mintec and a specialist in commodity data, said that the sporadic rains experienced in Andalucia, Spain and elsewhere are thought to not be enough.
Holland said that olive oil is harvested between October and January in the Mediterranean region. “If it doesn’t rain soon, then we will have another poor crop”, Holland continued. There are fewer good quality olive oils available, and customers want the best. . . “At this rate, the market players say we’ll be lucky to make it through the rest of the year with good oils.”
Some are less concerned. David Granieri is the president of the National Union of Olive Producers. He said that the increase in prices is good news, particularly in Spain.
In these conditions, we think that producers who have in recent years increased their efforts to produce high-quality oils and protect biodiversity can finally be valued the way they deserve.