Analysts warned us in the summer that the prices of olive oil would rocket, and now it has become official – the price of Italian olive oil has more than doubled in the last year taking it to its highest level in a decade. The price of Italian olive oil has soared 25% month-on-month in November, and Spanish virgin olive oil is up 15% year-on-year.
The price hike is down to a poor harvest in the European regions which produce olive oil; olive trees in the Mediterranean suffered from extreme heat and drought in May and June, and others were affected by a fruit fly infestation. Moisture is vital to deliver good produce when it comes to olive oil, so the drought had a devastating impact to the overall crop. This year’s crop is predicted to be 40% down on the 1.77 million tonnes produced in 2013-2014. A similar drought in 2012 saw a 13% price rise, but this time the poor harvest has bumped it even higher.
Other olive-growing countries such as Greece and Turkey can’t save the harvest, as Spanish production accounts for 50% of the world’s olive oil. Second to that is Italy, a region that delivers 15% of world production but has also suffered a bad crop. But with worldwide demand for the precious liquid increasing by 60% over the past 20 years, the price hike will be unwelcome on all corners of the globe.
What does this mean for retailers and consumers of olive oil? Apart from expecting to pay much more per bottle, UK retailers need to remain vigilant for food fraudsters and opportunists aiming to trick consumers. Authentic Spanish and Italian olive oil will cost much more than average, so bear this in mind – if retailers or consumer opt for a cheaper version, then most likely it is being mis-sold.
The UK has fallen victim to food crime in the past, and this olive oil price hike could be the next opportunity for food fraudsters. Install supplier management software to ensure transparency in your food chain and avoid a damaged brand reputation.