Olive oil could become more expensive this year following a drop in production last year after bad weather hampered the harvest. Portugal’s Minister for Agriculture warned a 30 percent drop in national olive production in 2016, to less than 500,000 tonnes, is expected to be partially offset by a rise in prices this year.
Bad weather has been blamed for a drop in production in various sectors, but has hit the olive oil industry particularly hard.
However, according to Minister Capoulas Santos, lower production years usually produce better quality olives.
“Unfortunately, 2016, from a weather point of view, was very bad for agriculture and led to drops in production in a number of sectors, particularly olive oil,” the Minister said, adding that “when production falls prices tend to increase.”
Therefore, the loss seen from a drop in the quantity produced “is at least partially offset by a rise in prices. And we hope that will happen this year,” he elaborated.
According to Capoulas Santos, lower production years usually produce better quality olives, although the average quality of Portuguese olive oil “is very good,” as technology is available to maintain reasonable levels of quality.
According to the latest agricultural projections from the National Statistics Institute (INE), production of olives for oil is expected to have fallen by 30 percent year on year in 2016 to 500,000 tonnes due to “adverse weather and annual production alternation of traditional olive groves.”
Portugal’s second largest olive oil-producing region, the Trás-os-Montes and Alto Douro, has said it suffered around a 20 percent drop in production, which will inevitably push prices up, something that is seen as negative by the sector.
Trás-os-Montes and Alto Douro produces between 80,000 and 90,000 tons of olive oil every year.
The head of the region’s AOTAD olive oil producers’ association, António Branco, argued that an increase in price does not compensate for work put into production.
Olive oil is the region’s second most important product after wine, and annually moves around €30 million.
In the Alentejo, which produces 70 to 80 percent of the country’s olive oil, a 40 percent drop in production was noted, although a consequential rise in prices is seen by producers there as par for the course.
In 2015, the price per kilo of olives was between 36 and 38 cents, although some types of olives reached 55 cents per kilo.