WSJ reports olive oil prices rise due to record heat wave in Spain

A record heatwave in Spain, the largest olive oil producer, is likely to affect the country’s olive oil production, push prices higher and threaten further food inflation. The Wall Street Journal with reference to experts and manufacturers. The newspaper notes that Russia’s special operation in Ukraine has already led to a shortage of sunflower oil, which forced consumers to look for an alternative.

Now olive oil prices are rising again due to fears that heat and drought in Spain will affect the upcoming olive harvest.

Kyle Holland, market analyst at Mintec, noted that the market price of extra virgin olive oil from Spain has increased by about 7% over the past month. He expects olive oil harvests to drop by almost 30% if conditions do not improve in the coming weeks. The WSJ recalled that olive picking starts in October.

The analyst added that a small crop could see prices currently hovering at $3.8/kg rise to $4-4.25/kg, a record since Mintec’s surveillance began 20 years ago. A poor harvest is also expected in Italy, Tunisia and Portugal, which are also major producers of olive oil.

Cooperativas Agro-alimentarias, representing the interests of Spanish farmers, expects a significant decline in olive oil production in 2022, to less than 1 million tons, compared to 1.5 million tons in recent years.

The publication notes that olive trees, although adapted to a hot and dry climate, still do not tolerate extreme conditions. Temperatures in the country have reached 45°C in recent weeks, resulting in a shortage of water for irrigation.

Formerly WSJ informedbut about problems with the coffee harvest in Brazil, which can raise the cost of a cup of this drink. The low harvest, the newspaper notes, could exacerbate the shortage of international supplies and contribute to a new rise in prices.

While global consumption will outstrip production for the second year in a row, stocks of coffee in the warehouses of the Intercontinental Exchange, according to Fitch Solutions, are at their lowest level in the last hundred years, the newspaper writes.

See also Bloomberg wrotethat the worst drought in California in 1200 years, the rise in fuel and fertilizer prices caused a rise in the price of tomatoes, tomato paste and ketchup in the United States. Water scarcity is reducing output in a region that accounts for a quarter of the world’s processed tomato production.