The price of olive oil could begin to peak after the all-time highs this summer. The price at origin started in October with a notable 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.
An evolution that suggests a moderation in food inflation, acting minister Luis Planas anticipated yesterday. The head of Agriculture foresees that the price of oil will remain the same or register a “slight decrease,” according to what he stated from a fair in Vigo.
This basic food is already paid so expensively, almost like a gourmet product, that the sector doubts that consumers will accept increases like those of recent months, indicate industry sources consulted. Its price increased 52.5% in August compared to a year ago, with a monthly increase of 8.7%. So 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 by price,” the industry explains.
In the agri-food sector they hope that the new olive oil campaign, which has just begun, will not be as disastrous as the last one, in which barely 633,000 tons have been produced due to the drought and heat, half of what in the previous five years. They are considering a figure of around 750,000 tons depending on the autumn rains, according to calculations by agri-food cooperatives. This small increase in production is what makes the Government think about moderating prices that reach supermarkets.
It will depend, however, on the producing area. The Unió de Pagesos union estimates that the average harvest losses in Catalonia will be between 60% and 90%, with a production that will not exceed 7,000 tons, taking into account that in a normal campaign about 33,000 tons are produced. Last year, also greatly affected by the lack of rain, production was 16,000 tons.
In dryland olive trees, in some regions such as Alt Camp, Terra Alta, the north of Ribera d'Ebre and Les Garrigues, losses will reach between 95% and 100% due to drought. While in support irrigation areas, such as the Riudecanyes reservoir, in Baix Camp, where the supply may have been intermittent due to water restrictions, they will also suffer significant losses, reaching 30% of the harvest. The dryland olive tree area in Catalonia is 80,979 hectares and the irrigated area is 23,126, according to data from the Climate Action Department.
The persistent drought is compromising food production in general and pushing up prices for consumers. In 2022, the lack of rain and costs caused agri-food production to fall by 8.8% in Spain, indicates a study by CaixaBank Research presented yesterday. The gross value added (GVA) of the sector has also decreased by 5.6%. On the positive side, the report suggests that lowering production costs can help contain food prices.
