Supplies of olive oil are set to rise while prices fall, after a two-year drought in one of the world’s largest producers has finally relented.

Last year, olive oil prices rose internationally after Spain experienced its second consecutive summer drought, which led to a 60% decline in production.

But following more favourable weather, Spanish growers are expecting a stronger harvest which is thought to lead to lower prices once production and costs stabilise.

Speaking to the Times, CaixaBank Research economist Pedro Álvarez Ondina said: “For the olive industry the major drag was the lack of rain in the last two-and-a-half years. You also have the general increase in production costs because it’s pretty energy-intensive.

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“We have seen the first signs that the sector is doing a little bit better because of a better weather situation.”

In May, extra virgin olive oil was predicted to reach over £16 a litre in the coming month, a further rise from £14 earlier this year, as global production plummets to its lowest level in more than 10 years.

It is not the only category to see experience challenges in its supply chain in 2024.

Earlier this week, juice giants Tropicana and Innocent warned that an outbreak of citrus greening disease, which impacts both colour and acidity of oranges, has spread to major producers and is likely to drive up prices for orange juice.