Olive oil prices are set to climb further this year – heading to more than £16 a litre for a bottle of extra virgin – amid a drop in global production to the lowest level in more than a decade.
Lower production in Greece, Morocco and Turkey as part of the natural cycle of olive growth is expected to offset an improving situation in Spain and Italy, where trees have suffered from extreme heat and drought in recent years as the climate crisis wreaks havoc on harvests.
Just under 2.3m tonnes are expected to be produced globally this year, according to the latest data from the International Olive Council, down from the 2.5m produced in last year’s difficult harvest and well below the 3.4m in 2022. For the second year in a row, demand is expected to outstrip supply, putting pressure on prices for shoppers.
The price of a litre of mass-market branded extra virgin olive oil is expected to top £16 next month, according to industry insiders, after an increase to about £14 earlier this year.
Some more premium brands such as Odysea and Belazu are already retailing at more than £18 a litre, while Napolina is selling for almost £15 a litre in some stores, with Filippo Berio just over £13.
“Supply is difficult and not sufficient to meet demand,” said Walter Zanre, the UK boss of Filippo Berio, one of the world’s biggest olive oil producers, who warned that retail prices were expected to rise again in coming weeks.
Some UK supermarkets have already begun putting bottles in security boxes to deter theft of olive oil, which has been named as the most wanted item for shoplifters in Spain.
The latest available official UK data shows the average price of a litre bottle of olive oil had already soared by 39% in the year to March to just over £8, according to the Office for National Statistics. The price has more than doubled since 2018 and continues to rise.
Production around the world is being affected by more extreme weather caused by the climate crisis. There are hopes that output this year could be helped by a return to more normal weather in Italy and Spain, where trees are just coming into bloom. However, production is expected to be up to 60% lower in Greece and down by more than half in Turkey, as trees in both countries recover from big harvests in 2023.
Producer prices for olive oil soared more than 60% in Italy and Spain last month and more than 80% in Greece, according to the IOC. High prices have prompted switches to other oils such as sunflower and rapeseed.
The Italian trade body the Associazione Granaria di Milano said bottlers were being forced to replenish depleted stocks, driving up wholesale prices again in recent weeks, after a period of stability since a big price jump in January.
“When we get to the other side of the summer it could light the blue touch paper and [wholesalers] will be able to charge whatever they like for what is left,” Zanre said.
Zanre said Filippo Berio would be bringing in oil from South America for the second year in a row to support production but added that buying up stock there was more difficult this year because of restrictions on supply in Argentina and Chile.
