Olive oil prices may have softened this year after a stellar 2015, but one analyst isn't expecting a sudden plunge with a series of factors helping to prop up the market.
Loraine Hudson, a market analyst at research firm Mintec, told CNBC Thursday that "tight stocks in the EU" will keep a floor under the commodity that's widely used in cooking.
Olive oil is one of the most volatile soft commodities, with prices being driven by supply. Last year, prices skyrocketed due to issues in Spain and Italy, the EU's two largest producers of the commodity.
Spain – Europe's largest olive oil producer – suffered from particularly dry weather causing a reduced harvest. Meanwhile in Italy, an infection killed many trees, forcing farmers to cut down and burn thousands of acres of potential crop.
"It's a very difficult times for the olive farmers, that's for sure," Hudson told CNBC. "Both of those facts had a massive effect on production last year."
She explained that in Italy last year prices went up to nearly 6 euros per kilo, compared to an average of around 3 euros per kilo. However, the market is now showing signs of reaching a balance. Hudson said that "there has been some demand rationalization, partly due to the supply shortage last year, but also because prices hit such a high."