Flowering of trees in May indicates prospect of good crop this year
Good quality extra virgin supply now very limited
The bulk of remaining olive oil stocks in the Mediterranean are in Spain as a result of the poor crops in Greece and Italy.
As had been predicted earlier in the year, supplies of good quality extra virgin olive oils are now very limited, with the majority of the stocks in Spain falling into lower quality categories.
Regarding this year's crop, the flowering of olive trees in May indicates the prospect of a good crop and, as a result, in recent weeks there has been a slight easing of market prices for lower grades of extra virgin and also of pure olive oil. However, when compared with levels this time last year, prices are still much higher.
Prices for top quality extra virgin have remained high and in some cases have even risen due to lack of availability. Good quality organic extra virgin substantially increased in May.
That slight easing in price for the lower grades means potentially that discount' or COD products will cost less. However, blends that contain better quality extra virgin (such as the main brands and own label products) will not benefit.
But this week has seen a reversal of the recent trend and there has been a firming of prices again, according to industry sources. This is due to Spanish producers pushing prices back up as they control the majority of the remaining stocks. Spain will now have to balance its need to sell stocks with keeping prices firm.
Expectations are that the market will remain stable until we get close to the new crop.
Prices will then depend on how much stock remains before new season processing commences.
Sterling's weakness against the euro could be another factor increasing import costs.
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