The price of olive oil could begin to touch the ceiling after this summer’s historic highs. The price at origin has started in October with a marked decrease, to 7.59 euros per kilo on average, according to the Poolred system, the lowest in a month, while supermarkets maintain the limit of up to ten euros per liter of extra virgin in most brands – there are exceptions above eleven euros -.
Acting Minister Luis Planas predicted yesterday a development that predicts a moderation in food inflation. The head of Agriculture predicts that the price of oil will remain or register a “slight drop”, as he stated from a fair in Vigo.
This basic food is already so expensive, almost like a gourmet product, that the sector doubts that consumers will accept increases like those of recent months, according to consulted industry sources. Its price increased by 52.5% in August compared to a year ago, with a monthly increase of 8.7%. Therefore, sales have fallen by 12%. “If consumption had not been reduced there would have been a risk of shortages, supply and demand have been regulated with the price”, they explain from the industry.
In the agri-food sector, they hope that the new olive oil campaign, which has just started, will not be as disastrous as the last one, in which barely 633,000 tons were produced due to drought and heat , half that during the previous five years. They calculate a figure of nearly 750,000 tons, depending on the autumn rains, according to the agri-food cooperatives. This small increase in production is what makes the Central Government think about a moderation of the prices that reach the supermarkets.
It will depend, of course, on the production area. The Unió de Pagesos union calculates that the average harvest losses in Catalonia will be between 60% and 90%, with a production that will not exceed 7,000 tons, bearing in mind that in a normal campaign around 33,000 are produced . Last year, also greatly affected by the lack of rain, production was 16,000 tonnes.
In dryland olive groves, in some regions such as Alt Camp, Terra Alta, the north of Ribera d’Ebre and Garrigues, losses will reach between 95% and 100% due to the drought. While in the support irrigation areas, such as the Riudecanyes swamp, in the Baix Camp, where the supply may have been intermittent due to water restrictions, they will also suffer significant losses, which will reach 30% of the harvest. The dryland olive area in Catalonia is 80,979 hectares, and the irrigated area is 23,126, according to data from the Department of Climate Action.
The persistent drought is compromising food production in general and pushing up prices for consumers. In 2022, the lack of rain and costs caused agro-food production to fall by 8.8% in Spain, according to a CaixaBank Research study presented yesterday. The gross added value (VAB) of the sector has also decreased by 5.6%. On the positive side, the report notes that lower production costs may help contain food prices.
