Olive oil prices are shooting up after a poor olive crop in key producer Spain and more price rises are expected in coming months, Hamburg-based edible oils analysts Oil World said on Tuesday. "Olive oil prices exploded by 40 percent during the past 10 weeks and are set to rise further on sharply reduced world production in 2012/13," Oil World said.
The trend is mainly because of drought in Spain, which is forecast to cut the country's olive oil production in the season running from October 2012 through September 2013 to only 1.08 million tonnes, from 1.72 million in the previous season. "Severe drought has taken its toll on olive trees as well as other agricultural crops," it said.
The drought may cause olive oil output to fall 50 percent in some Spanish regions, it said. Global olive oil output in 2012-2013 is likely to fall to 2.96 million tonnes from 3.60 million in the previous season, it said. Output would be below forecast consumption of 3.32 million tonnes, so stocks would have to be used up. Spain's reduced export supplies can be partly compensated by higher shipments from Tunisia, Morocco, Turkey and possibly Syria, it said. But world export supplies are still likely to fall in the coming year.
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