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Olive oil prices to rise due to heatwave

 (Sous Nicolas)
(Sous Nicolas)

The price of olive oil is set to rise as much as 25 percent as heatwaves hit production across Spain, a leading exporter has warned.

Major supplier Acesur, which sells 20,000 tonnes of olive oil in the UK every year, said that price increases for customers could range between 20pc and 25pc.

It sells around 20,000 tonnes a year in the UK and packs own-label brands for Sainsbury’s, Tesco, Waitrose, Morrisons, and Asda. The supermarkets also stock its La Espanola brand, which is the third biggest in the UK.

It said the heatwave had a “drastic” effect on Spain’s olive oil production. Spain is also one of the world’s largest olive oil exporter, producing nearly half of the world’s olive oil.

However, the country, along with other parts of Western Europe, which produce olive oil, including Italy and Portugal, has been experiencing extreme temperatures and a lack of rain in recent weeks.

Italy, for example, is suffering from its worst drought in 70 years, with estimates suggesting that Italy’s olive oil production could be between 20 and 30 percent lower than it was last year.

In the north of Italy, lakes, and rivers are at record lows, and officials are suggesting that this year will bring the hottest and driest on record, reports the Telegraph.

But the country, along with other parts of Western Europe which produce olive oil, including Italy and Portugal, has been experiencing extreme temperatures and a lack of rain in recent weeks.

Last year, Spain produced around 1.4 million tonnes of olive oil but he said officials were now forecasting as little as one million tonnes for this season.

Most of the olives in its products are grown in Andalucia, southern Spain, which has had very little rainfall in recent weeks.

Speaking to the BBC, the company’s export manager, Miguel Colmenero, said the impact of the heatwave on production was “drastic”.

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.

Mr Colmenero added that this would eventually feed through into prices for customers, although there would be a three to four-month lag.

The average price of own-label olive oil in the four biggest UK supermarket chains was up 50.2 per cent on last year at the beginning of August, according to retail research from Assosia. From June to July, average prices increased 28.5 per cent.

Mr Colmenero also added that disruption to the supply of sunflower oil from Ukraine was also contributing to “dramatic” price increases, as people turn to olive oil as an alternative.

Ukraine was previously the world’s top sunflower oil exporter.

A rise in the price of olive oil piles more pressure on already-squeezed households, who’re facing the biggest income squeeze on record.

The Bank of England revealed that it was now expecting inflation to hit a four-decade high, of 13.3 per cent later this year.