It's not a good time for olive oil at the moment. Prices are expected to increase sharply for two reasons: there has been a prolonged drought in Andalusia, in southern Spain -- the world's biggest producer of olive oil -- and a blight in Puglia, the main olive-growing area in Italy. A combination of these factors is leading to shortages.
If the weather in Spain does not improve, the crop is expected to be 40 per cent less than the 1.77-million-tonne harvest of 2013-14, although that was a particularly bumper harvest.
The crop is also suffering due to this bumper harvest. As such, it exhausts trees and means that the following year's harvest is reduced.
The harvest in Andalusia takes place from October to January. It is unlikely that this year's harvest will reach a million tonnes, according to David Erice from Spain's Small Farmers' Union.
Spain produces 50 per cent of the world's olive oil, and Andalusia produces 73 per cent of this. Olive-oil exports from Andalusia totalled €1.5 billion in 2013.
The price of olive oil may rise by up to €0.50 a litre due to shortages, according to Infavolia, Spain's olive-oil federation. However, there is the possibility that retailers will absorb this price rise, and so consumers may not feel the full effects of the shortages.
The blight in Italy is also likely to have an effect on prices, as it is the second-largest producer of olive oil in the world, with around 15 per cent of the oil coming from Italy.
There is no cure for the blight affecting the Italian crop. The only solution is to burn the infected trees to stop the bacteria from spreading, said Raffaele Piano, a local grower. He estimated that olive oil prices will rise by 30 to 40 per cent.
© 2014 European Supermarket Magazine – Europe’s grocery retail magazine, for all your breaking supermarket, convenience-store and FMCG news. Article written by Nicole Gernon.
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