Olive Oil Industry Faces Daunting Moment

Spain's Deoleo, the largest producer of olive oil globally, and the owner of renowned brands like Bertolli and Carbonell, is facing a complex operating landscape shaped by climate change, rising prices, higher interest rates, and robust inflation which are affecting the entire olive oil value chain.

The industry has been hit hard by two consecutive years of extreme heat in Spain, significantly reducing olive harvests and triggering a sharp rise in prices that surprised both consumers and industry experts. 

Spain is the largest olive oil producer in the world, responsible for over 40% of global production and significantly impacting global prices. In January, the price of extra virgin olive oil reached a record high of €9.2 per kilogram. However, by mid-April, the prices had come down to around €7.8, providing some relief to consumers.

The decrease in prices of agricultural products was partly due to improved production forecasts and favorable rains in March and April. As a result, the drought conditions were slightly alleviated. However, analysts caution that the outlook for future prices is still uncertain. While recent rainfall offers some optimism, the industry must remain cautious until more definitive forecasts for the 2024/2025 harvest emerge.

Due to the growing severity of climate conditions, olive trees are becoming increasingly vulnerable. As a result, the industry is facing an urgent need for adaptation. To address this challenge, experts are calling for a sector-wide commitment to sustainability, innovation, and quality. This approach should focus on meeting consumer needs while enhancing the predictability and stability of olive oil prices.