A bigger-than-expected Spanish olive harvest may bring relief to inflation-addled shoppers later this year in the form of lower supermarket prices.
The latest figures from Spain's Agriculture Ministry suggest the country’s next harvest could come in 11% above what it had earlier projected and up almost 30% on 2023, when drought and high costs of farming saw a smaller-than-usual crop from the country that supplies almost half the world’s olive oil.
The harvest increase means more olive oil will be produced, an outcome that could lead to price cuts in shops if wholesalers and retailers allow some of the supply increase and cost reductions drizzle down to consumers.
Food and other consumer price inflation took off in mid-2021 and soared for a time after the invasion of Ukraine by Russia, a war pitting two key food producers against each other, with olive oil demand and prices soaring as Ukrainian sunflower oil supplies dried up for months as the conflict intensified.
OECD data show food inflation at around 2% in 2019, but climbing from 4% from 2021 to 12% by late 2022, with average supermarket prices for olive oil doubling in some countries in the meantime.
Consumer price inflation has since eased across most European countries, recently falling to around pre-2021 levels. However, food price inflation remains above the wider consumer indices and prices for most food goods, as well as necessities such as fuel and electricity, remain far above levels of a half-decade ago.
Some UK supermarkets have since 2022 been putting security tags on olive oil bottles to deter thieves, while others have locked their supplies of the increasingly expensive cooking staple behind glass doors.
Less pricey olive oil, if it comes about, could reduce consumer reliance on arguably less healthy but cheaper seed oils. Research papers published recently by the American Medical Association suggest people who consume olive oil have "reduced all-cause mortality" and are less likely to develop dementia.
