Olive oil is facing a seismic shakeup. Across Spain, a sharp drop in the olive harvest has pushed prices to unprecedented levels, with surges reaching into the double digits in some periods. Producers report that while demand remains steady, consumer buying has shifted as the cost of oil rises, and many buyers are turning to cheaper alternatives elsewhere in the market.
Increased heat and unusual weather patterns disrupted harvests nationwide, including a significant decline in Alicante. Spring rains stripped some trees, and cooler spells complicated flowering, leaving orchards with smaller yields than in typical years.
The result is a price spike that has pushed the cost of extra virgin olive oil to new highs and reduced the amount available at retail, with wholesale and consumer prices reflecting the tighter supply. This has contributed to softer sales volumes as households seek more affordable options and producers brace for a longer recovery period in demand.
Hugo Quintanilla, a representative of Asaja and a producer with Señoríos de Relleu, notes that price increases began even before the upheavals caused by the Ukraine conflict. He explains that while some oil markets have normalized, the Spanish olive sector has faced persistent stock limitations. The current market environment has created a challenging scenario as producers navigate tightened margins and uncertain consumer behavior.
Joaquín Sempere, manager of the El Tendre plant in Elche, highlights another consequence: export sales have fallen substantially, with some international buyers shifting to alternate oils such as rapeseed due to price competitiveness. This shift is contributing to a decline in customer bases abroad and adds to the pressure on producers who rely on overseas markets.
Meteorological negativities punish olive trees
Julián Úbeda, head of the olive sector at La Unió, acknowledges that prices are higher than usual, yet notes that recent campaigns had put producers closer to equilibrium before the disruptions. He observes that Alicante producers are at a disadvantage relative to regions like Andalusia, which host larger estates and receive more CAP support. Higher costs for energy, fuel, and fertilizer compress margins, making it harder for some producers to absorb increases without passing them along to shoppers. Some supermarkets, he adds, continue to price at or above eight euros per liter, underscoring the uneven impact across the market.
Pedro Reig, director of the Valencia Community Supermarkets Association (Asucova), argues that broad distribution acts as a brake on price rises. He explains that while retailers must cover part of the higher costs, the impact is not uniform across all products or stores, and some stock increases can help dampen spikes at the shelf.
Mills across the province report material losses as the season proves financially challenging. With oil production down, mills have not been able to recover typical volumes, leading to an overall damage tally in the tens of millions of euros. Agriculture in Alicante faces a difficult year, compounded by losses in other crops such as cherries, almonds, and medlars. The citrus sector also felt pressure from market saturation linked to fruit imports from other regions.