Olive oil supplier Acesur, which supplies the UK's biggest supermarkets, announced earlier this week that oil prices could rise by 20-25% over the next three to four months due to heatwaves in Spain.
Spain produces nearly half of the world's olive oil and, along with other oil producing countries including Italy and Portugal, has been experiencing record high temperatures and a lack of rain in recent weeks.
Last year, Spain produced around 1.4 million tonnes of olive oil but Acesur Export Manager, Miguel Colmenero is forecasting as little as one million tonnes for this season. He added that the dry weather could also impact next season's crop, if olive trees could not grow new branches due to lack of water.
This is having an impact on global prices…
In July, the Mintec benchmark price for extra virgin olive oil rose to its highest level so far this year, up by 7.3% on the previous month and 14.2% on the previous year, according to the market research group.
The average price of own-label olive oil in the four biggest UK supermarket chains was up 50.2% on last year at the beginning of August, according to retail research firm Assosia. From June to July, average prices increased 28.5%.
If the dry weather continues prices could rise further.
Disruption to the supply of sunflower oil from Ukraine (previously the world's top exporter of sunflower oil) is also contributing to price increases as people have turned to olive oil as an alternative, increasing demand. But if we start to see more supplies of sunflower oil once again coming from Ukraine, this could bring some relief.
We're advising foodservice operators to adapt and flex menus to reduce (or even remove) usage of olive oil in dishes if possible.
An alternative to consider could be rapeseed oil which is cheaper than olive oil at around £30 for 10 litres and is produced in the UK making it a more sustainable product. However, the different, more nutty taste simply won’t work for all dishes.