Spanish olive oil prices surged to near an all-time high on slumping output and after disease hit trees in top consumer Italy.
Stockpiles in Spain, the world’s largest producer, have fallen to “critically low levels,” Hamburg-based industry researcher Oil World said. Hot, dry weather cut the Spanish harvest, while exports to Italy haven’t slowed enough to make up for reduced supplies and shipments to Asia remained strong, the researcher said.
Prices for Spanish extra-virgin olive oil rose 5 percent last week to $4,272 a metric ton, the highest since April 2006 and near a record, Oil World said in an e-mailed report.
“It’s quite a concerning acceleration in the price of olive oil,” Lamine Lahouasnia, head of packaged-food research at Euromonitor International in London, said by phone Tuesday. “The supply shortages as a result of the drought, and particularly under-production in Spain, have filtered through to the marketplace.”
Output in Spain and Italy plunged by more than 50 percent in the 2014-15 season that ends Sept. 30 according to figures from the Madrid-based International Olive Oil Council. Italian trees have been hurt by the spread of xylella fastidiosa, a deadly bacterial disease first discovered in the country in 2013, as well as fruit-fly infestations, according to the U.S. Department of Agriculture’s Foreign Agricultural Service.
Spanish olive oil exports totaled 380,000 tons in the five months through May, down 27 percent from the same period a year earlier, Oil World said. The drop wasn’t enough to make up for lower production, and shipments were 66 percent larger than in the same time in 2013.
Consumer prices for olive oil increased about 10 percent on average globally in the past year, faster than overall inflation for packaged foods at about 3.7 percent, according to Euromonitor.