The Spanish olive oil sector is grappling with increased concerns about how much olive oil may be available for purchase in the coming months as the June report from the Spanish government shows a significant drawdown in stocks. According to the report, stocks have decreased by circa 73,000 metric tonnes month-to-date, and industry players estimate that the available olive oil stock in the hands of producers is less than 205,000 metric tonnes. Therefore, should the rate of drawdown continue at this pace, olive oil supplies may run out before any fresh supply is obtained from the new harvest starting in October.
The decreasing amount of olive oil available for all qualities has driven prices to their highest levels ever recorded, according to Mintec data, with the Mintec Benchmark Price (MBP) for Extra Virgin Olive Oil from Andalusia reaching €7.35/kg on 7th July 2023. The olive oil market has entered a phase of extreme volatility, with prices skyrocketing due to the scarcity of offers and the continuously evolving situation, rendering previously quoted prices obsolete within a matter of hours and leaving the market struggling to find stability.
The situation is particularly tense as the high prices have failed to dissuade consumers from purchasing olive oil. Consequently, industry players are reportedly scrambling to secure supplies, driven by the looming risk of running out of stock and the potential of increased prices in the coming months. The sense of urgency has sparked a surge in buying activity, further fuelling market instability.
Mintec will update this story as more details emerge.