The price of olive oil is set to spike by between 20 – 25 percent in the next three to four months as the heatwave hits production in Spain- the leading exporter.
Spain produces nearly half of the world’s olive oil but production has been disrupted as the country has experienced extreme temperatures and dry weather in recent weeks. Last year the country produced around 1.4 million tonnes of olive oil and has been projecting a decline in production as a result of dry weather.
Other olive oil-producing countries such as Italy and Portugal have also reported a similar incident. The dry weather saw Italy declare a state of emergency in four of its five regions last month, after experiencing the worst drought last seen 70 years ago.
Spain is the second leading Market for Kenyan olive oil after Turkey. Kenya imports an average of $106k in olive oil annually. In 2020, Kenya imported $290k in Olive Oil, becoming the 82nd largest importer of Olive Oil in the world. In the same year, Olive Oil was the 869th most imported product in Kenya
During the period under review, Spain was the fastest growing imports market in olive for Kenya by $62.3k.
Olive oil is mainly used in cooking, and the manufacture of other products such as soap, cosmetics, and medicine. With a price surge, it means that the prices of these commodities which have been on a rising spree in the last couple of months are likely to skyrocket further.
For instance, the cost of 800g of Menengai Soap cream is retailing between 207 shillings and 216 shillings in various supermarkets across the country. The same quantity of Jamaa cream is retailing between 200 shillings and 230 shillings.
On the other hand, the prices of cooking oil have jumped by almost 33 percent Since March 2022 in Kenya, making it the country’s most expensive essential commodity.
A liter of Fresh Fri and Avena cooking oil in major shopping outlets now sells at 415 shillings. A 5 liter and 10 liters of the same commodities are going for 1,850 shillings and 3500 shillings, respectively.
Kenyans have been anticipating a decline in prices of cooking oil after manufacturers last month announced the possibility of price contraction of the commodity by the end of the same month, following a correction in the prices of crude and palm oil in the global market.
This signaled cheaper products if importers and manufacturers pass the benefits to the consumers. However, the price decline has not yet been reflected in shopping outlets meaning Kenyans will have to wait for more time.