The skyrocketing price of olive oil is showing no signs of slowing down as extreme weather in Spain and Putin’s war continues to worsen the crisis.
A ‘double whammy’ impact of war and draught has added fuel to fears that increased shortages of the popular cooking oil will continue with no respite until 2025.
Temperatures in Spain reached up to 40C in April as rainfall has been in short supply, prompting poor harvests.
As the world’s largest olive oil producer ‘Spain dictates the market’ according to Walter Zanre, chief executive of leading oil brand Filippo Berio.
As a result, the UK’s grocery sector has had to act accordingly, raising the prices of olive oil products.
The price of olive oil has shot up in supermarkets (Data: Trolley.co.uk)
The nation’s largest grocer, Tesco, has raised the price of its olive oil products by a huge 45 per cent to £4.01 from £2.75 year on year, according to data from Trolley.co.uk.
Sainsbury’s have followed suit, propping up the price of their own-branded olive oil by £1.56, a 44.8 per cent increase.
Premium product prices including Mr Zanre’s Filippo Berio are also on the rise, seeing a bottle of its olive oil climb up from £6.84 to £8.64 (23.7 per cent).
According to separate figures from analyst NIQ, a litre bottle of Filippo Berio has shot up 21.5 per cent year on year, by an average of £1.44 per litre.
M&S’ own-branded bottle has seen the lowest hike in price, however it remains one of the more expensive options.
Other own-branded products such as La Espanola and Napolina have also been forced to raise costs, rising 27.4 per cent and 31.5 per cent respectively.
Mr Zanre didn’t play down the issue, saying the effects on the oil industry have been nothing short of seismic, despite producers in Greece, Italy and Portugal not suffering with the extreme heat.
He told The Grocer: ‘We envisage there is not going to be a respite in the market before 2025. I don’t think it would be an exaggeration to say that the olive oil industry is in crisis.’
He said that there was no sign of the situation in Spain easing. ‘The news that we are currently getting from Spain is pessimistic. There literally has not been any rain, so the trees are dropping fruits to protect themselves from the lack of water.’
He warns that there won’t be enough oil to sustain the industry until the next crop
‘So there is going to be a big pinch point.’
Temperatures in the Spanish province of Andalucía soared to more than 100F (40C) last spring, causing havoc during the early growing season. Pictured: A field of olive trees in Jaen, Spain, in November following a severe drought in the region.
An olive tree farm with dried olive branches in Tuscany during July as the country suffered from a heatwave and drought
The crisis is only set to heap more pressure on the already spiralling retail prices.
NIQ data shows that at a total market level, edible oil prices have risen 33.1 per cent or 80p per kg, in the year to 4th May 2023.
In the case of olive oil, those rises appear particularly steep. Pre-promotion prices of olive oil and extra virgin olive oil are up 41.4 per cent on average across the traditional big four supermarkets in the year to 30th May.
Gary Lewis, chief commercial officer at edible oils supplier KTC said: ‘There is nothing oil suppliers can do about this.
‘The imbalance between supply and demand will keep prices high until either demand falls or supply increases. It’s that simple.’
Grocery prices in general are still climbing rapidly, surging at the fastest rate in nearly 45 years in April.
Staple products including sugar, milk and pasta have all climbed sharply.
Last month, the Competition and Markets Authority (CMA) opened up an investigation into the sky high prices of food and fuel.
The regulator said it would look at whether a ‘failure in competition’ meant customers were overpaying for goods.
Meanwhile supermarkets have said they are working hard to make prices as low as possible.