Burning question

Wildfires across huge areas of southern Europe mean even more bad news for olive oil and table olive packers. It is impossible to predict the full effect on this winter’s prices for olive oil or table olives, but there will be direct consequences. This is not a complete wipe-put story, since established olive trees with deep root systems can recover from fires, although this will take time. Young olive trees are more susceptible to fire damage.

The immediate impact will be on packers and blenders of olive oil, particularly in Italy: these skilled folk have a network of suppliers for very specific oils with relatively rare qualities. The suppliers of such rarities are spread over the continent, from Gibraltar and north Africa down to the middle east. The trading network is complex and known to a handful of olive oil blending experts.

In a year when the mainstream crop is already looking patchy and fraught, this will mean higher costs for the retailers. In the UK, the multiples are reluctant to let their double digit margins take a hit and will do their level best to make sure that suppliers carry the burden. The situation is, however, beyond horse trading. Bulk olive oil prices will be non-negotiable, where there is product to be had. Looking at the Mediterranean over the next few weeks, the following impacts can be expected. Industrial tomatoes for peeled plum tomato canning lines can be expected to be short, since crop irrigation is being used for firefighting. Chopped tomatoes, passata and tomato paste can be made from almost any variety of tomato and production is not limited to southern Italy. Table olives are under a shadow, with a high risk of localised damage: a lot of olives will have been burnt off the trees. Durum wheat, essential for pasta manufacture, may have escaped the worst of the heat waves, but export tonnages will probably be restricted.

For the latest information on the European forest fires, click here.