Portugal: Olive oil inflation generates counterfeiting and theft – 10/27/2023 – Market

Portugal is experiencing an unprecedented spike in the price of olive oil. A 750 ml bottle of the extra virgin version now costs an average of 9.03 euros (R$ 47.56) for the end consumer: an increase of 94% compared to the 4.65 euros (R$ 24.50) charged by same packaging at the beginning of 2022.

The rise in price of the product, which is one of the stars of Portuguese cuisine, is affecting family consumption habits and is already reflected in changes to recipes and “rationing” of olive oil in some restaurants.

The appreciation also boosted crime. Producers report an increase in theft, both of olives and the already processed substance. Health authorities have also warned about the sale of adulterated olive oil on the internet.

Frauds include mixing with other vegetable oils or olive oil of lower quality than advertised. One of the most common scams is the sale, through advertisements on social media, of low-quality oil dyed with green dye, falsely advertised as “artisanal and family-produced” olive oil.

The situation in Portugal is multifactorial, but has been exacerbated by the crisis faced in neighboring Spain, the world’s largest producer of the valuable liquid. Affected by drought, heat waves and forest fires, Spanish production plummeted. With the drop in supply, prices rose quickly.

Information from the Poolred platform, which gathers data from the Spanish market, indicates that the price of a kilo of olive oil reached, at the end of August, 8.25 (R$ 43.49) euros per kilo among producers. A year earlier, it cost 3.87 euros (R$20.40).

As it is an international commodity, the situation in Spain quickly spread across the globe, with repercussions felt from the United States to India, where the restaurant sector has been pressuring the government to reduce taxes on the product.

“Contrary to what one might think, the price of olive oil is not established by producers. These are prices set on the stock exchange and Portugal follows the values”, says Pedro Lopes, president of Olivum (Association of Olive Growers of Southern Portugal) .

In addition to the reduction in Spanish production associated with the drought, there were also crop failures in several parts of the Mediterranean basin, which “means that there is no olive oil on the market”, according to the entity.

In addition to the scarcity of the product, there was also an increase in the production chain, with an increase in energy and fertilizer costs, greatly impacted by the war between Russia and Ukraine, which began in February 2022.

“Last year, the market was supplied with olive oil that was in stock due to the record production in 2021, but that is now over”, says the leader of the producers’ association. “More important for the rise in the price of olive oil was the large increase in production factors, such as the price of agricultural diesel.”

Faced with the uncertain scenario, the Portuguese are trying to adapt. Fearing that the inflationary rise of the product will continue, many have stockpiled as much as they can.

Previously available in any supermarket, 3- and 5-liter packages have practically disappeared from the shelves. According to Google Trends, a platform that monitors search patterns, the volume of searches related to olive oil and its costs is on the rise.

Owner of a small grocery store in the center of Lisbon, Indian Nivedita Devi says she has already readjusted the final price of the product more than ten times since the beginning of the year. “I already notice that the price increase keeps some customers away. There are people who have already replaced olive oil with other oils, or even with butter”, she details.

Although they recognize the current scenario of adversity, investment in technology and in the rationalization of production and extraction methods is the Portuguese’s bet to turn things around and resume the good result obtained in 2021, when the country became the sixth largest world producer of olive oil.

“In the future, we will be able to surpass the record achieved in the 2021 harvest, due to the increase in the area of ​​modern olive groves in hedgerows and because we have many new olive groves, which are only now coming into production”, says Pedro Lopes, from Olivum.

In addition to preparing for adverse weather conditions, producers are also now dealing with an increase in crime that directly targets olive trees and mills (facilities where olive oil is extracted).

While in Spain and Greece thefts of thousands of liters of olive oil have been recorded, in Portugal what has attracted attention are the thefts of olives, since a large part of the country is already in harvest season.

“Olive theft is a problem that affects several interested parties throughout the production and consumption chain. We are talking about a crime that destroys a vital part of our economy and culture, and that harms the sustainability of the sector in Portugal”, says the leader of the Olive Growers Association of Southern Portugal.

To try to curb the practice, which mainly affects small producers, police authorities have reinforced surveillance. Olive grove owners have also organized themselves to monitor and report suspicious situations.

Meanwhile, Asae (Food and Economic Security Authority) intensified inspection operations against counterfeit olive oil. Recent actions have dismantled gangs that sold vegetable oil as if it were extra virgin olive oil, but, given the high price of the product, the authorities themselves recognize that the work is just beginning.