Olive oil can become about 20 cents more expensive in April, potentially reaching 5.50 euros per kilogram for the producer if there is no rainfall this month. This estimate comes from the Small Farmers Association. The secretary general of the state, Miguel Cobos, argues that the current price is around 5.30 euros per kilogram, the highest since 2012 when it surpassed five euros, about two euros above levels from the previous year.
Virgin olive oil opened the year around 1.80 euros per kilogram in 2020, a figure recalled by experts. Yet forecasts of a poor harvest helped push prices higher through the summer. Today, producers say prices cover production costs but leave only a slim profit margin as costs rise and a very difficult year continues. The increase does not offset a roughly 50% drop in production compared with the previous campaign, according to the UPA secretary general.
On another note, there is roughly a 20% drop in domestic consumption in Spain. Cobos states that high prices have driven some buyers toward cheaper greases. When prices fall, domestic consumption could rise toward 600 thousand tons; when prices rise, it could dip to around 500 thousand tons, he notes.
Regarding oil stocks, the professional recalls that about 400,000 tons remain in campaign links while 700,000 units were produced, including 145,000 units in Córdoba. Spain imports oil from Algeria, Tunisia, Egypt and Portugal. More than 200,000 imported tons have been accumulated so far this campaign that began in October, and additional imports remain possible, he adds.
Domestic consumption is assured and participation in foreign sales remains strong. Spain has solidified markets abroad and should not face sourcing problems, Cobos states. He acknowledges that exports are protected, yet they are influenced by high prices. Looking ahead, he says the oil sector is very sensitive to any movement. If April brings rain and a strong flowering, prices are expected to ease gradually. The forecast for the next campaign rises if conditions worsen. The current producer price is around 5.30 euros per kilogram; if rainfall occurs, it could drop to 5.20 or 5.10 euros, but without rain prices could rise by up to 20 cents per kilogram.
In store, from 6 euros
Regarding the impact on supermarket shelves, Cobos explains that sometimes price increases are absorbed, and other times the increase is felt only after purchases at previously set prices. Virgin olive oil is already available in stores from six euros per kilogram, with premium options selling for 8 to 10 euros per kilogram depending on packaging and labeling.
Prices never seen before
Macarena Sanchez del Aguila, director of the Industrial Olive Producers Association, suggests prices may continue to rise if there is no rain. If the next rainfall forecast for the coming weekend holds, prices are likely to stabilize. Without rain, the upcoming campaign could face difficulties, she warns. The forecast, however, is uncertain and rain would influence price stability in the near term.
At origin, current prices point to about 5.2 euros per kilogram for extra virgin, 4.87 euros for virgin, and no lampante price due to insufficient activity. A year ago, according to industry records, extra virgin stood at 3.48 euros, virgin at 3.38 euros, and lampante at 3.18 euros.
Del Aguila notes that it is unclear how high prices will rise. The question remains: what is the consumer willing to pay? In the transforming producer sector, the aim is stable prices that do not surge beyond normal levels. Sharp increases have not been seen since earlier eras, and those spikes were driven by production shortfalls that could not meet market demand.