The Associació de Producció Agrària de Mallorca (APAEMA) predicts a second year of low oil production at state level, although this will not be the case in Mallorca where it is expected to be abundant and of high quality. This fact will have an impact on the price of oil to continue rising

The ‘illencs’ producers predict a second year of low production at state level and with direct consequences on the maintenance of high prices, due to the dimension of their companies. All this in spite of the fact that the prices of the oil of Mallorca are governed by other criteria, APAEMA points out.

According to businessmen of the Associació de Producció Agrària de Mallorca (APAEMA), last year Andalusia and other regions of Spain had a bad harvest and this year is expected to be worse. With the exception of Mallorca, they assure, where great abundance and quality are predicted. If to this situation we add that the oil in ‘stock’ or link is limited, the equation gives high prices and without forecasts of lowering. This is what they point out in a press release.

precio aceite

Causes of oil price rise: massive buying and cost recovery

Its president, Miquel Coll, questions “whether the rise should be so accentuated and here we enter the speculative factor”. In this sense, Coll assures that there has been the typical context that originates the price increase: “When there are constant price increases there is a massive purchase of the product to avoid paying more over time, resulting in little wholesale oil in circulation”.

Another issue that the Majorcan producers analyze is the role of the distributors. According to the association of the Federació de la Petita i Mitjana Empresa de Mallorca (PIMEM), the sector is taking advantage of this situation to recover the margins lost a few years ago, when the oil of the large state producers was above 2 euros. “At that time costs were not covered and now it is normal that they want to recover. One more factor that explains these prices”, Coll points out.