There are several factors that affect to olive oil price: stocks, present and future harvest expectations, quality, type of olive oil…
To analyze the aspects that affect the olive oil price . We must distinguish between those due to the world market of olive oil and other aspects that can be controlled in part by the farmer.
The world market is the one that generates more fluctuations in the price of olive oil. The wholesale prices usually move on a fork of between € 2 and € 4 / kg depending on the annual supply and demand of olive oil. These distortions make olive oil a very volatile raw material, depending on harvest expectations.
The current price of olive oil, category EVOO, € 2.40 / kg (average sales prices in poolred for March 2019). Remember that the prices of olive oil shown by poolred are for bulk operations and do not include the VAT that the farmer will receive (+10% ).
Olive oil price production influence
Olive oil production has to meet demand and prices are responsible for regulating consumption. However, the low impact of variations in the olive oil price at the origin in the consumer price causes aggressive declines and price increases.
The commercial strategy of the distribution is to increase its commercial margin when the olive oil falls and reduce it when it rises. This policy favors price instability in this market. By not transferring the real prices of the olive oil market directly to demand. In addition, it puts the economic viability of distributors in trouble when several campaigns with high olive oil prices are chained. On the other hand, with the entry into force of the food chain law in 2014, the olive oil offers below the original price have been halted.
Currently, Spain is the largest producer of olive oil, with approximately 50% of world production ( 3,000,000 t ). Jaén is the province with the highest production, about half of the total produced in Spain. After a few years of loose harvests, in Spain, an important olive harvest for the 2018/2019 campaign is estimated.
Factors that influence to olive oil price
Olive oil stocks at the end of the campaign
The olive harvesting campaign to produce Olive oil starts in October. Extra-early harvest olive oils are produced during this month.
However, until the second half of November the olive harvest is not generalized. Therefore, the presence of a sufficient campaign link is necessary to supply the olive oil market until the new campaign oil arrives.
There is talk that 300,000 tons suppose a sufficient link to avoid shortages. Short campaign links, stress up prices and favor early olive harvest.
World olive oil harvest expectations
Harvesting capacities higher than consumption lower the olive oil price .
The usual thing due to the be the olive tree, is that the years of good harvests alternate with years of low harvest.
The weather conditions have an important influence on harvest expectations. Extreme drought conditions detrimental to olive tree productivity. Average rainfall of less than 500 liters / m2 means low harvest expectations and vice versa.
The dry and cold autumns reduce the fatty yields of olives and negatively affect the production.
Olive oil quality
The quality of olive oil has some influence on the prices to be paid. As of July 30, 2018, the following price differences in the olive oil market are observed.
Taking as reference the lampante oil with a acidity level base of 1º. Virgin olive oil is priced at + € 0.05-0.15 / kg and extra virgin olive oil price + € 0.20-0.45 / kg. These prices are approximate, oils of exceptional quality are quoted at a higher price. In addition, it can vary depending on the abundance of each type of oil.
The organic extra virgin olive oil price virgins are scarcer and have a higher purchase price.
The olive variety and its resistance to oxidation are also taken into account.
In addition, there are exclusive olive oils such as the one extracted from ancient olive trees, which is sold at high prices.
World production and demand
Currently, the global consumption of olive oil is around 3 million tons. On the other hand, the production has important variations of between 2.5 and 3.5 million tons. When oil production exceeds demand, the price of olive oil falls and vice versa.
Studies on the properties of olive oil
Every time a most of the population worries about eating healthy foods and prefers buy olive oil. Global impact studies on the beneficial health properties of olive oil have been carried out. The discovery of the oleocantal (powerful natural anticancer ) and the predimed study on the Mediterranean diet support the consumption of extra virgin olive oil. In addition to these studies, it is shown that the high percentage of oleic acid present in olive oil improves cardiovascular health.
Olives price will depend on the destination of it:
When olives are harvested for the production of olive oil, the factor with the greatest influence on the price is the fatty yield. In this regard the olive variety and the state of the olive trees has a great influence. A distinction is also made between the olive collected from the tree and the one from the soil. Although there is not a big difference, the price of the lampante oil, coming from olives in poor condition, is lower than the extra virgin olive oil.
For table olives, within the same variety, larger olives are valued more.
Also, the quality and condition of the olive is taken into account, the olives being depreciated with signs of annoyance. Pests such as violet mealybug and fungi like gusset of the olive tree, the green olives depreciate.
On the other hand, green olives picked manually have a better price. Due to the damages that occur in the olives collected using vareadores.
In 2018, some purchase olive prices for green olives are 120 pesetas for olives of the variety Morisca and 130 pts for Manzanilla Cacereña (caliber 220-230). To these prices of € 0.72 and € 0.78/kg, a settlement premium must be added.
Normally, green olives collected by mechanical means are used to produce black olives. This allows to hide the damages that occur during the harvest.
We have translated the information on our website from Spanish to English. Note that some words may have seen their meaning altered during their translation.