A poor harvest has been anticipated which now means that the price of Olive oil is to rise from â‚¬2.40 to â‚¬2.70. The prolonged drought in Spain‘s biggest producing region has had a major impact as did the main olive-growing area in Italy where the crop has been affected.
There may still be time for rain to save the situation as harvesting usually takes place between October to January. However without the weather improving, the crop is predicted to be 40% down. Spain produce 50% of the world‘s olive oil, 73% comes from the province of Andalusia, in 2013 olive oil exports from Andalusia were worth â‚¬1.5bn (£1.1bn).
This is not the only issue, as bumper harvests have also left trees exhausted as they produce fewer olives. Prices of olive oil are predicted to rise and some analysts predict supermarkets will absorb the cost in a bid to maintain their competitive edge.
Suppliers say that speculators are contributing to the rise in future prices by capitalising on the uncertainty caused by the drought. There are also claims that some producers are keeping stock in preparation of selling it at a higher price later in the year. If the harvest is good that means the price is less but if the harvest is bad then it means selling much less for a higher price.
Olive oil has always been popular in the Mediterranean diet and is also renowned for its health benefits. It is usually exported to France, Portugal and Italy. Italy, the second biggest producer in olive oil is currently facing difficulties as a bacteria Xyella fastidiosa has shrivelled olive branches in the region.
“There is no cure,” said one olive farmer, “The only solution is to burn the infected trees to stop the bacteria spreading quickly. Prices will rise by 30 to 40 percent because there will be fewer olives and therefore less oil produced. ”
As farmers pray for rain, shoppers may have to risk paying more for their olive oil this year due to the drought and problems in production.