Olive Oil Prices Rise in Spanish Supermarkets Despite Decrease in Origin Price

Olive oil prices rise in Spain despite falling origin costs, sparking concerns over consumption trends and market dynamics in the EU.

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Safak Costu
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Olive Oil Prices Rise in Spanish Supermarkets Despite Decrease in Origin Price

Olive Oil Prices Rise in Spanish Supermarkets Despite Decrease in Origin Price

Olive oil prices in Spanish supermarkets have risen by 4.1% since January 2024, even as the origin price has decreased by €1.21 compared to January. The Mintec Benchmark Prices (MBP) for extra virgin olive oil have been declining, with the MBP for Andalusia settling at €7.80/kg as of April 19th, down from a record high of €9.20/kg in January.

The decline in origin prices follows an increase in production estimates for Spain's 2023/24 olive oil season. However, concerns have emerged regarding consumption trends, with a decrease influenced by the high retail prices of olive oil compared to other cooking oils. "One-third of Italians have reduced their consumption of extra virgin olive oil due to soaring prices, with nearly half substituting it with cheaper seed oil," according to a survey by the Piepoli independent research institute.

The EU's total olive oil production is estimated to reach 1,488,000 metric tonnes in 2023/24, a 7% increase from the prior season, but still below the five-year average. Greece and Turkey are also facing significant production challenges, further complicating the market outlook. The combination of varying production estimates and external factors, such as export bans and economic conditions, adds complexity to the olive oil market, leaving stakeholders maneuvering through fluctuating prices and supply dynamics.

Why this matters: The rising retail prices of olive oil in Spain, despite decreasing origin prices, highlight the complex dynamics of the olive oil market. This trend has broader implications for consumers, producers, and the economy, as it affects purchasing decisions, production strategies, and overall market stability.

Italian producers are pushing back against the reported drop in olive oil consumption, stating that sales of higher-quality Italian extra virgin olive oil are actually up. Industry data indicates that domestic sales of extra virgin olive oil produced in Italy, which can cost up to 14 euros a liter, were up 8% in the first two months of 2024. The pushback over the consumption findings is attributed to Italians' close relationship with olive oil, which is seen as not just a product but a representation of their culture and diet.

Key Takeaways

  • Olive oil prices in Spanish supermarkets up 4.1% despite origin price drop of €1.21.
  • Mintec Benchmark Prices for extra virgin olive oil in Andalusia down from €9.20/kg to €7.80/kg.
  • EU's 2023/24 olive oil production estimated to increase 7% but still below 5-year average.
  • One-third of Italians reduced olive oil consumption due to high prices, substituting with cheaper oils.
  • Italian producers claim domestic sales of high-quality extra virgin olive oil up 8% in early 2024.