Forecast: Extra Virgin Olive Oil Prices Expected to Exceed £16 per Liter Next Month

Olive oil prices are poised to continue their upward trajectory this year, with projections indicating a climb to over £16 per liter for a bottle of extra virgin olive oil. This surge is attributed to a decline in global production, reaching the lowest level in over a decade.

The reduction in olive production in countries like Greece, Morocco, and Turkey, due to the natural cycle of olive growth, is expected to offset any improvements seen in Spain and Italy. Extreme heat and drought in recent years, exacerbated by the climate crisis, have taken a toll on olive trees in these regions, impacting harvests.

Global olive oil production is estimated to reach just under 2.3 million tonnes this year, a decrease from the 2.5 million tonnes produced in the previous challenging harvest and significantly lower than the 3.4 million tonnes in 2022. With demand expected to surpass supply for the second consecutive year, consumers can anticipate price pressures.

Industry insiders predict that the price of mass-market branded extra virgin olive oil will surpass £16 per liter next month, following an increase to around £14 earlier this year. Premium brands like Odysea and Belazu are already retailing at over £18 per liter, while Napolina is nearing £15 per liter in some stores, and Filippo Berio is priced just above £13.

Walter Zanre, the UK head of Filippo Berio, warns of further price hikes in the coming weeks due to supply shortages. Some UK supermarkets have resorted to placing olive oil bottles in security boxes to deter theft, as olive oil tops the list of most-wanted items for shoplifters in Spain.

Official UK data reveals a staggering 39% increase in the average price of a liter bottle of olive oil in the year to March, reaching just over £8. This price has more than doubled since 2018 and continues its upward trend.

Extreme weather events driven by the climate crisis are affecting olive oil production worldwide. While hopes are pinned on a return to normal weather in Italy and Spain to boost output this year, production is expected to plummet by up to 60% in Greece and over 50% in Turkey, as both countries recover from significant harvests

in 2023.

Producer prices for olive oil surged by more than 60% in Italy and Spain last month, and by over 80% in Greece, according to the IOC. These high prices have prompted a shift to alternative oils like sunflower and rapeseed.

The Italian trade body, Associazione Granaria di Milano, reports that bottlers are scrambling to replenish depleted stocks, driving wholesale prices higher in recent weeks following a period of stability since a major price hike in January.

Looking ahead, Walter Zanre anticipates that the situation could worsen after the summer, potentially leading wholesalers to charge exorbitant prices for remaining stocks. Filippo Berio plans to import oil from South America for the second consecutive year to support production, although acquiring stock has become more challenging due to supply restrictions in Argentina and Chile.