Olive oil prices may fall 20%

Olive oil brands, such as Leonardo, Borges and Figaro, are expected to get cheaper by up to 20 per cent, as crop production turns normal. During the course of the year, olive oil prices had increased by 60 per cent.

“Price increases came about due to a severe crop shortfall last year, coupled with steep rupee depreciation. While this year’s crop is normal and producer prices in Spain and Italy have started a downward trend, it will take about six months for this to translate into a 20 per cent decline in retail prices in India,” V.N. Dalmia, President, Indian Olive Association, said.

Due to the price hike last year, the branded oil category expanded from Rs 500 crore to Rs 550 crore. “The olive oil category expanded by 10 per cent in value terms, as revenues shot up due to the price increase,” Dalmia said.

Prices of premium olive oil brands, such as Leonardo (the market leader), have been inching up over the past three months from Rs 595 to Rs 799 a litre. However, freebies by some players, such as Dalmia Continental, which imports the Leonardo brand, helped cushion the high prices.

“By 2015, we expect prices to drop further by 30-40 per cent as the economic and political situation in the country stabilises,” said Dalmia. In 2006, the olive oil category had faced a similar situation and it took nearly two years for prices to correct. At that time, premium olive oil brand prices had dropped to nearly Rs 250 a litre.

Olive oil imports also slowed down due to the depreciating rupee. “The rupee has stabilised and imports will go up. Indians have become health conscious and this will have a positive impact,” he said. Today, almost 60 per cent of olive oil imports is from Spain, where brands such as Borges and Figaro come from, and the balance is from Italy.

purvita@thehindu.co.in

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