After two years of extreme heat and drought in Spain causing olive oil production to plummet and prices to rise, Spanish news media El Economista claims crisis is coming to an end.
Industry forecasts now predict a strong recovery in the upcoming campaign, starting in October, with production expected to reach between 1.4 and 1.7 million tonnes. This increase is anticipated to bring prices down to around five euros per liter.
Earlier this year the price on olive oil reached 12 euros - 16£ in Britain - per litre.
Some white-label brands in Spain have already begun to lower prices to below seven euros, especially after the elimination of VAT.
Unlikely to reach same price as before crisis
However, the industry warns that reducing prices below five euros would be unsustainable for Spanish farmers, as it would leave them with little to no profit margin. Before the crisis, olive oil prices ranged between 3.5 and 4 euros per liter, but returning to those levels seems unlikely.
Spain, the world leader in olive oil production, typically produces 1.2 million tonnes annually. However, recent droughts have severely impacted output, with the 2022/2023 campaign yielding only 664,033 tonnes.
Conditions still below average
Improved weather conditions this year have boosted production to 851,000 tonnes, slightly above forecasts but still below average.
While Spain's production outlook is improving, global prices may still be affected by uncertain weather conditions in other Mediterranean countries.
Major retailers in Spain like Mercadona, Carrefour, and Alcampo have already responded by lowering their olive oil prices.
Despite consumer organization Facua's claims of coordinated price adjustments among supermarket chains, there is no evidence to support this, and the Ministry of Consumer Affairs is investigating the matter further.
