Sunflower oil price rises as supply from Ukraine cuts and drives olive oil down

No time to read?
Get a summary

Joy rarely lasts in a region battered by limited resources, and Alicante’s olive oil industry has just experienced a stark reminder of that truth. The province faced a heavy, ongoing rainy spell that disrupted production, and even after two years of fragile recovery, the sector struggled to cover operating costs. A stretch of nearly 20 days of bad weather shattered any early optimism, as repilo, a deciduous fungus, spread through olive groves and threatened the next harvest. The outlook across several areas was disheartening, with some locales at risk of not harvesting a single olive.

The recent two pandemic years left the high olive oil surplus in Alicante with serious consequences. Compared with other Spanish regions like Aragon or Andalusia, where dense crops and higher yields are common, Alicante bears steeper production costs. Rugged terrain, especially inland in El Comtat, l’Alcoià, or Las Marinas, compounds the challenge.

During the last season, farmers in these communities received about 2.40 euros per kilo for extra virgin olive oil, a price that barely covered harvest and maintenance costs in Alicante. Analysts estimated the break-even price at around 3 euros, and the prior campaign had even worse economics at roughly 1.80 euros per kilo, prompting many growers to abandon parts of their harvest rather than accept losses (observations from industry sources). The next yield looked bleak for many growers as a result.

That situation began to shift in the most recent campaign. Although the harvest dipped by roughly 15 percent to around 45 million kilos, prices rose through the season, approaching 3.50 euros per kilo. This offered a much-needed breath of relief for an industry that had endured recent hardship. The price trend improved further after the Ukraine conflict disrupted sunflower oil supplies, creating a temporary shift in consumer demand and allowing olive oil prices to reach as high as 3.80 euros per kilo (industry commentary and market analysis).

Sunflower oil price increases tied to Ukraine supply cuts influence olive oil market

The improving outlook after years of trouble proved short-lived, as weather patterns again took center stage. The region faced a brutal spell of rain that persisted for days, reshaping projections for the upcoming harvest. The repilo fungus arrived in force, threatening to defoliate trees just as bloom began and leaving olive groves unusually vulnerable to weather-related damage. Agricultural associations warned that, under such conditions, losses could mount quickly (reports from the local olive sector and farm officials).

J. Ulian Ubeda, a leading voice in the sector, noted that the problem tends to surge when full bloom is imminent. He explained that olive trees become weak and flowers remain exposed when leaves fail to provide shelter, making future yields highly uncertain. Ubeda warned that as of now roughly 90 percent of the next harvest may already be compromised, with only signs of potential partial recovery if humidity drops and sunny days return—and even then, the outlook remains deeply negative (statements from Ubeda and the producer union).

The regional impact will vary by area and cultivar. In districts like Alcoy, El Comtat, and Marina Alta, where rainfall is most intense, the local olive varieties, notably Blancalta and, to a lesser extent, Manzanell and Alfafarenca, are taking the hardest hits. Hilario Calabuig, who manages an olive operation, described conditions as alarming and predicted significant production losses in affected zones. He stressed that defoliation was severe in some plots, making a strong, timely harvest unlikely (remarks from farm management and local growers).

Juanvi Ferrando of l’Almàssera de Millena added that Blancalta is showing the greatest susceptibility within El Comtat, while acknowledging that the repilo problem had already begun to manifest due to moisture from persistent fogs. On the other hand, Hugo Quintanilla, a representative for Asaja and producer of Señoríos de Relleu, observed that while not all areas are hit equally, pricing dynamics have shifted. He noted higher prices for refined, pomace, and seed oils following the sunflower oil surge, and expressed cautious optimism that consumers may prefer olive oil at similar price points due to the growing perception of quality (interviews with regional industry players).

The manager of the El Tendre oil plant reported that repilo appeared in their area as well, even though rains were not as heavy around Camp d’Elx, and he anticipated watching the coming weeks closely as flowering resumes (institutional update from the plant manager).

Estimating losses remains challenging, as outcomes depend on campaign prices and the evolving impact of the fungus. Current projections suggest that losses could exceed 40 million euros if unfavorable weather persists and production continues to lag behind demand. The climate’s impact is not isolated to olives; cherries in Alicante have also borne a heavy toll. The industry group Cerezas Montaña de Alicante cited about 4.5 million euros in losses from a roughly 60 percent drop in the cherry harvest, with bees failing to pollinate during the rainy flowering period. The president of the local origin association and cooperative leaders stressed that the longer rainy spell has produced particularly negative effects on this delicate fruit. There is cautious optimism that later varieties might provide some income if favorable weather returns (statements from industry associations and cooperative leaders).

No time to read?
Get a summary
Previous Article

Expanded Coverage: Investigation Into Lleida Taxi Driver Stabbing

Next Article

Madrid probes high-profile contracts and corruption claims tied to pandemic procurement