The price of olive oil is set to soar as heatwaves hit production in Spain, the supplier of the UK's major supermarkets has warned. Shoppers at Sainsbury’s, Tesco, Waitrose, Morrisons and Asda will all be affected by the news from producer Acestur, which said that prices could rise by 20-25% in the coming months.
Spain, Italy and Portugal have been experiencing “extreme” temperatures and a lack of rain in recent weeks. Around 1.4 million tonnes of olive oil is produced in Spain each year, and Acestur produces aout 200,000 tonnes of that, selling to over 100 countries. The company packs own-label olive oil for Tesco, Waitrose, Sainsbury's and Asda as well as its own La Espanola brand, selling around 20,000 tonnes to the UK in total every year.
The price increase comes as the average price of own-label olive oil was up by 50.2% on last year at the beginning of August.
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Spain produces nearly half of the world's olive oil and most of the olives are grown in Andalucia, southern Spain, which has had very little rainfall in recent weeks. The lack of rainfall has also been evident in other olive oil-producing countries in Western Europe, including Italy and Portugal.
The company's export manager, Miguel Colmenero, told Grocery Gazette that the impact of the heatwave on production was "drastic", adding that the dry weather could also impact next season's crop, if olive trees could not grow new branches due to lack of water.
Last year, Spain produced around 1.4 million tonnes of olive oil but he said officials were now forecasting as little as one million tonnes for this season. Mr Colmenero said this would eventually feed through into prices for customers, although there would be a three to four month lag because many companies would already have signed 12-month contracts with retailers.
Mr Colmenero said disruption to the supply of sunflower oil from Ukraine was also contributing to "dramatic" price increases, as people turned to olive oil as an alternative, increasing demand. Ukraine was previously the world's top exporter of sunflower oil.
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