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Olive oil aficionados may soon feel the pinch at the checkout counter as prices are expected to surge, with forecasts predicting a rise to over £16 per litre for extra virgin varieties.
The anticipated increase comes in the wake of a sharp decline in global production, reaching its lowest levels in more than a decade.
Key olive-producing regions like Greece, Morocco, and Turkey are grappling with reduced output, attributed to the cyclical nature of olive cultivation. Despite some improvements in Spain and Italy, where adverse weather conditions have hindered harvests, the overall global production is projected to be just under 2.3 million tonnes this year, down from 2.5 million tonnes last year and significantly lower than the 3.4 million tonnes recorded in 2022. With demand expected to outpace supply for the second consecutive year, consumers can anticipate upward pressure on prices.
Mass-market brands are likely to witness a substantial price hike, with industry insiders forecasting prices exceeding £16 per litre next month, compared to approximately £14 earlier this year. Premium brands such as Odysea and Belazu have already breached the £18 mark, while others like Napolina and Filippo Berio are commanding prices nearing £15 and £13 per litre, respectively.
The scarcity of olive oil has become a cause for concern, prompting retailers to adopt measures like security boxes to deter theft. The surge in prices is also reflected in the average cost of a litre bottle of olive oil in the UK, which surged by 39% in the year leading up to March, reaching just over £8.
Extreme weather events fueled by the climate crisis continue to disrupt olive production worldwide. While hopes are pinned on a return to normal weather patterns in Italy and Spain, which are currently in bloom, Greece and Turkey are expected to face production declines of up to 60% and more than 50%, respectively.
The soaring prices have prompted a shift towards alternative oils like sunflower and rapeseed, while producers are struggling to replenish depleted stocks amidst surging demand. Bottlers in Italy and Spain witnessed a more than 60% increase in olive oil prices last month, with Greece experiencing an even steeper surge of over 80%.
Looking ahead, industry experts warn of potential further price hikes, particularly as wholesalers may exploit dwindling supplies post-summer. Despite efforts to bolster production by sourcing oil from South America, challenges remain due to supply restrictions in countries like Argentina and Chile.
