Price fluctuations for olive oil are closely tied to weather patterns, and industry leaders are watching the forecast with particular interest. A prolonged period of cloud cover and uncertain rainfall is expected to persist, with analysts suggesting that only after a wet spring will markets feel confident enough to ease price pressures. This perspective comes from Ignacio Silva, the chief executive of Deoleo, the Spanish multinational best known for brands such as Carbonell and Hojiblanca. He spoke during the 38th Consumer Congress, which took place in Zaragoza and concluded on a Thursday, framing weather as a pivotal driver of oil prices in the near term.
According to Silva, the rainfall distribution in April and May will be decisive. If the spring proves ample in rain, farmers will be able to breathe easier, and the industry will likely see a softening of prices. He emphasized that this could mark a turning point for the market, potentially easing the inflationary pressure that has characterized the sector recently. The price trajectory, he noted, is not simply a function of harvest size but also of how weather translates into actual supply and production costs across the value chain.
Looking ahead to 2024, the harvest across the country is expected to reach about 750 million kilograms, with optimism that it could hit 800 million thanks to recent rainfall. Silva pointed out that the majority of olives are gathered between October and November, so the January projections for the season offer a solid baseline for the year. He suggested that the situation may not deviate dramatically from current expectations. Historically, the 2023 harvest produced roughly 600 million kilograms of olives, compared with 1,200 million kilograms in 2022, underscoring how much year-to-year weather can skew production and, by extension, pricing dynamics.
This sequence of weather-driven variability has contributed to rising production costs and inflationary pressures within the sector. A decade ago, the industry paid around 2,200 euros per tonne for olives that would be refined into oil. Today, that price has surged to around 8,000 euros per tonne, illustrating the cost squeeze felt along the supply chain. Silva reminded listeners that, even amid higher input costs, consumer prices at the supermarket level have not risen in a directly proportional fashion, a discrepancy that complicates the industry’s ability to pass costs through to shoppers without dampening demand.
As head of Deoleo, Silva has stressed his company’s broader role in stabilizing the sector through periods of volatility. He described the current inflationary climate as a historically challenging moment for the olive oil industry and asserted that the unusual price movements in the commodity market do not automatically translate into equivalent price tags for consumers. The expectation remains that a robust harvest could help restore normal pricing, particularly if consumption trends begin to rebound. While there are reports of a decline in olive oil consumption of up to a fifth, Silva noted that there is little to no substitution toward other oils within Spain, a signal of the country’s enduring dependence on this particular product.
Deoleo asserts its stance
In response to rumors that the corporation had disclosed to the market regulator that it was examining market conditions, Deoleo’s leadership made a clear statement: the company is not for sale. This declaration underscores the management’s commitment to maintaining stability and confidence among investors, suppliers, and customers during a period of intense price fluctuation. The executives highlighted the balance the firm seeks to strike between safeguarding the value chain and ensuring affordability for consumers, even as costs move in a direction that is not always favorable to producers. Attribution: Deoleo leadership statements reported in industry briefings.