Olive oil prices are expected to fall significantly in the coming months, with experts predicting a potential 50% drop as the Mediterranean’s largest producing region, Andalusia in Spain, gears up for a bumper harvest.
The end of prolonged drought conditions is expected to boost production by 77%, with the region set to produce around 1 million metric tonnes of olive oil this season.
This surge in production offers relief to UK shoppers, who have faced record-high olive oil prices over the past two years. Gary Lewis of KTC Edibles, a major UK oil supplier, forecasts a substantial decrease in prices, estimating they could fall by 40-50%. “Prices could return to late 2022 levels, falling from €10,000 (£8,365) per tonne to €4,000-€5,000 per tonne,” Lewis said.
Consumers are likely to start seeing lower prices soon, with the full impact expected to be felt by the first quarter of 2024. The market, however, remains cautious until the crop is harvested and processed.
The price of olive oil in British supermarkets peaked this summer, with a 500ml bottle averaging £7.89 in August and September, according to Assosia. Recent weeks have seen a slight reduction, with the average price now at £7.52, as brands like Napolina and Filippo Berio begin to lower prices.
Kyle Holland, an analyst at Expana, pointed out that other key olive oil producers such as Greece, Turkey, and Tunisia are also set for improved harvests, which will further increase global supply. Greece is expected to produce 230,000 metric tonnes this season, up from 130,000 last year, while Turkey and Tunisia are also forecasting substantial gains in production.
As the olive harvest progresses from late October to February, experts agree that the increased supply should continue to drive prices down, providing much-needed respite for consumers after years of high costs caused by heatwaves and droughts.
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Olive oil prices set to halve as Mediterranean bumper harvest looms