World's largest olive oil producer calls for 'transformation' amid industry challenges

Rivas-Vaciamadrid: Deoleo, the world's largest olive oil producer, has declared the need for a "profound transformation" as the industry faces unprecedented challenges. The company, known for brands such as Bertolli and Carbonell, highlights a combination of climate change, soaring prices, high interest rates, and robust inflation as key factors impacting the olive oil value chain.

As per reports, Spain, which produces over 40% of the world’s olive oil, has experienced two consecutive years of extreme heat, severely limiting olive harvests and causing a dramatic surge in prices. This has left both consumers and industry veterans reeling.

The harsh inflation, combined with high interest rates and poor harvest forecasts due to ongoing droughts, has driven olive oil prices significantly higher. Extra virgin olive oil prices in Andalusia, Spain hit a record high of 9.2 euros ($9.84) per kilogram in January. By April 19, prices had slightly decreased to around 7.8 euros, according to Mintec’s benchmark index, down from approximately 8 euros at the end of March. This price reduction was partly due to improved production estimates and beneficial rains in March and April.

Deoleo remains optimistic that the current situation is cyclical, anticipating a return to more reasonable prices once harvest yields normalize. However, despite the positive impact of recent rains, the company maintains a cautious outlook on olive oil prices. "We still have months ahead of us until we know the possible volumes of the 2024/2025 harvest and until that moment, these movements will be punctual and prices will continue to be volatile," Guzman noted.

In response to these challenges, Deoleo emphasizes the need for significant changes within the sector. The company is committed to best practices in sustainability, innovation, and quality, with a strong focus on the consumer. This transformation, they believe, is essential for the industry’s future resilience and stability.