Olive oil producers in Alicante, especially in the northern districts, are hopeful as harvests recover. After a string of poor seasons in Andalusia, prices rose quickly, lifting the entire sector toward historic figures around 64 million euros. Market prices are now roughly triple the four-year average, enabling mills and farmers to partly offset earlier losses. Yet there is a careful note: a dramatic price jump could push some consumers toward cheaper oils, tempering demand.
The provincial olive oil sector has endured a long, dry journey. High surpluses in 2019 and 2020 pushed prices down to a low around 2.40 euros, leaving a substantial portion of the harvest unpicked because profit margins were too slim. Since then, prices have inched upward, but weather-related setbacks in recent years, particularly last season, kept the recovery from gaining full steam.
All of these factors converged to create a challenging environment that threatened the industry’s continuity. In the current campaign, the outlook has shifted dramatically in both harvest size and prices. Production in the province is expected to reduce the edge of irregular distribution by bringing in more than half of the harvest. Although olive volumes are modest in Vega Baja and Vinalopó, favorable conditions in El Comtat, l’Alcoià and Marina Alta point to a harvest sufficient to yield around 8,000 tonnes of oil globally.
Yet the defining element remains price. Drought has driven low yields in Andalusia, pushing bulk oil to about 8 euros per kilo. With production at that level, the province’s business volume could approach 64 million euros, a milestone not seen before. When compared with last year, the difference is substantial, given a much more cautious harvest and revenue around ten million euros lower at a subdued price level.
Relaxation
Hugo Quintanilla, founder of Señoríos del Relleu, notes that this campaign has brought prices to roughly three times the recent average. That relief benefits both farmers and oil mills, though he acknowledges concerns about how higher costs might affect consumption and consumer choices.
Consumer price data from the National Institute of Statistics shows oil rising by more than 50 percent year over year, with stores seeing around 10 euros per liter. It remains the item with the sharpest price increase among staples, outpacing pork, mineral water, soft drinks, and cereals. Inflation trends for oil will depend on broader inflation movements; early signals in November hint at a potential easing of around three tenths to 3.2 percent, aided by lower fuel costs and a slower rise in foods.
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Whatever unfolds, the market seems likely to hold near current levels. Joaquín Sempere, president of the El Tendre oil plant in Elche, emphasizes a risk in the current economic climate: some customers may drift away. If price sensitivity grows, some buyers might switch to sunflower or other seed oils, complicating the return to previous demand patterns. [Cited economic observations: regional market analysis, 2024]
José Miguel Ferrando of Almàssera de Millena offers a cautious view. He notes that future prices hinge on the Andalusian harvest and rainfall patterns. A lack of rain increases water stress for olive trees, which is not an encouraging sign for the season ahead. [Agricultural outlook report, regional forecasting bulletin]