Olive oil producers in the province of Alicante, especially in the northern regions, are rubbing their hands. Poor harvests in Andalusia after successive disastrous campaigns caused prices to rise rapidly. will carry the sector to historic business figures of around 64 million euros. Prices governing the market are three times higher than the average of the last four years, which will allow both oil mills and farmers to at least partially compensate for previous bad campaigns. All this, of course, is due to the fear that a sharp increase in prices could lead to a loss of consumers who prefer to buy cheaper oils.
The provincial olive oil sector is experiencing a long journey in the desert. First, it was the high surpluses in 2019 and 2020 that caused prices to bottom out.This situation, which remained at a maximum of 2.40 euros, caused a large part of the olive harvest to remain uncollected due to low profitability. From here on, prices began to slowly recover, but meteorological negativities that have reduced production to a minimum in recent years, especially those recorded last year, prevented us from taking advantage of this recovery.
The combination of all these factors has put the industry in a dead end and even put its continuity at risk. However, in the current campaign, things have changed radically, both in terms of harvest and prices. In terms of production, more than half of the harvest in the province will be harvested.It has an irregular distribution. Although the amount of olives is quite limited in the Vega Baja and Vinalopó regions, suitable conditions are provided for the volumes to be reached in the northern regions such as El Comtat, l’Alcoià and Marina Alta. . This will lead to the production of approximately 8,000 tonnes of oil worldwide..
However, the key to the campaign will be price, as fields in Andalusia are experiencing low yields as a result of drought. Bulk oil prices jump to 8 euros per kiloConsidering the production level achieved, it will bring the business volume of the province to be close to 64 million euros, which has not been reached so far. In fact, the difference is huge, considering that compared to last year, barely ten million euros were achieved at a lower price and also with a much more cautious harvest.
Relaxation
According to Hugo Quintanilla, producer of the company Señoríos del Relleu, in this campaign «Our prices are three times the recent averageThis is undoubtedly a relief for both farmers and oil mills. The problem, he admits, is the consequences this increase in prices might have for consumption.
According to the data provided by the National Institute of Statistics (INE) regarding the Consumer Price Index (CPI), Oil has become more expensive by more than 50 percent on an annual basisThis means that around 10 Euros per liter is currently paid in stores. It has been the food that has increased the most so far; because it is far behind the 14% of pork, the 11% of mineral water, soft drinks and juices, the 10% of sugar, cereals or milk. Although there is no forecast yet on the behavior of oil, the progress in November’s overall inflation points to a decline of three tenths to 3.2%, thanks to the decline in fuel and the lower increase in food.
Whatever happens, everything indicates that it will remain at levels similar to current levels, and Joaquín Sempere, president of the El Tendre oil plant in Elche, emphasizes that this poses a risk, because in the complex economic context we find ourselves in, customers may disappear. There will be consumers who prefer sunflower or seed oils and it will be difficult to get them back».
José Miguel Ferrando from Almàssera de Millena, however, does not dare to predict what the prices will be next year. «As always, he states that this will depend on the harvest in Andalusia and There is no rain at the moment, which exposes the olive trees to water stress, which is not a good sign.».