THE price of olive oil is expected to soar amid fears that a drought in Spain will cut the harvest at the world’s top producer by as much as 30 per cent.

Brokers are currently asking €3,000 (£2,080) per tonne for extra virgin olive oil, an increase of 20 per cent on last year’s prices.

Oscar López, market administrator at Sociedad Rectora del Mercado de Futuros del Aceite de Oliva, the olive oil futures market set up last year, said: “Consumers won’t pay those prices. Everything has a limit.”

Olives are grown on unirrigated land so rely on the elements for water. This year rainfall in Spain reached its lowest since records began in 1947, cutting the country’s water reserves to 50 per cent of capacity.

Even before the drought, olive oil producers had cut their estimates for this year’s harvest after severe frosts destroyed about 4 per cent of the crop. Although some trees have been replanted, they will not bear fruit for at least five years.

Olive oil brokers predicted that this year’s crop was unlikely to exceed 850,000 tonnes, compared with last year’s 990,000 tonnes and 1.4 million tonnes the year before.

“If it doesn’t rain the harvest will be a maximum 700,000 tonnes [and] if it rains it could reach 800,000 to 850,000,” said one broker in the olive-growing region of Andalusia.

The Confederación de Cooperativas Agrarias de España, the Spanish argricultural co- operatives federation, was less optimistic. Javier Lara, the co-operative’s olive oil expert, predicted a harvest of 700,000 tonnes or less.

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