Olive oil prices rise sharply due to drought

THE cost of buying olive oil in the Balearics has risen by 10 percent since January this year.
According to food distribution chains operating around the Islands, the price hike is due to drought in Andalucia, a key olive oil producing region, and to higher fuel tariffs. The central government ministry of Industry, Tourism and Commerce confirmed in a report yesterday that the cost of production increased by 44.04 percent over the last year. However, a Consumer Federation (Facua) were more scathing about reasons for the rise in the price of olive oil, saying that although they acknowledged adverse climatic conditions affected the olive harvest, they also suggested that product packaging and distribution played their part in passing on a higher tariff to the consumer. Food distribution companies retaliated by saying olive oil prices had reached a peak and were on the downturn. They claimed that before this month is out, shoppers will be paying less for the product at supermarket checkouts. Josep Oliver, president of original Majorcan olive oil brands, said that companies on the Island were maintaining the same prices as last year and had not been lured into asking the maximum from the purchaser as had been witnessed on the mainland of Spain. Oliver added that the rise in the cost of olive oil from Andalucia was actually beneficial to Majorcan producers as it reduced the competitive price differential.