Unstable olive harvests make olive oil price drops uncertain
Credit:Pixabay:Stevepb
The price of olive oil has not only been a contentious topic for consumers, but also for producers as prices continue to oscillate and uncertain harvests prevail.
Over the past year, it has become one of the most widely discussed topics, particularly due to its role as a staple in every Spanish household. After reaching prices not seen for a very long time, the chances of a price drop is a question on many people’s lips. Despite experts predicting a decrease in the market value of the product, this does not necessarily translate as a cheaper price on the shop floor…or at least not quite yet. Due to scarce olive harvests, production of olive oil has been at an all-time low. Previous figures show that stocks of olive oil were at 186,000 tonnes, barely enough to cover two month’s worth of demand. In comparison to previous years where around 400,000 tonnes of the product was the norm, concern and tension suffered by producers is unsurprising.
Olive harvests promising yet prices of olive oil not guaranteed to drop significantly
Hope is on the horizon, however. Harvests for 2024/2025 are expected to be more promising – experts have predicted that the upcoming harvest could produce stocks of up to 1.4 million tonnes – still below averages, yet 65% more than the previous harvest. These increases, along with anticipated improvements in global olive oil supplies, are expected to help bring down prices on supermarket shelves in the coming year. Turkey and Portugal have both confirmed strong harvests in their regions, for example.
It is important to note that despite increased production or stock, it is viable for producers to choose to maintain similar margins to safeguard their businesses and to recuperate from prior losses. Production chains have taken the toll of poor harvests and economic losses with higher production costs and a lower consumption rate – also affected by overseas conflict. On the supermarket shelves, customers may well be disillusioned with a minimal price reduction, especially in upcoming months, but Gonzalo Guillén, General Director de major packaging firm, Acesur has reassured the public that if prices are to drop significantly, this will likely become visible in April or May 2025.
Customers cannot expect olive oil prices to imminently return to those of pre-crisis
What remains clear is that although predictions can be made and hopes raised, it is essential to stay cautious as prices are determined not only by stock but also by how this is perceived by current markets. Admittedly, behind this chain are a series of further unpredictable factors such as the weather. Currently, it is forecast that prices will eventually drop to between 5 and 6 euros, but whether they will return to pre-crisis prices is a question that cannot yet be answered. In the short term, it is unlikely, especially given other variables, including competition from other oil varieties and stable recovery for olive growers and producers.
Olive oil, often referred to as “green gold,” is a key indicator for the Spanish, providing a strong reflection of the country’s economic health. However, consumers must be prudent, not expect sudden radical prices changes and should avoid drawing conclusions about Spain’s economy based on the cost of olive oil.
