World's largest olive oil producer says the industry faces one of its toughest moments ever

Spain's Deoleo, the world's largest olive oil producer, says the industry needs to undergo a "profound transformation" as it grapples with one of the most challenging moments in its history.

A perfect storm of climate change, soaring prices, high interest rates and robust inflation has taken its toll throughout the olive oil value chain in recent months.

Two consecutive years of scorching heat in Spain have limited olive harvests, culminating in an unprecedented price rally that has stunned consumers and industry veterans alike.

Spain accounts for more than 40% of the world's olive oil production, making it a global reference for prices.

"We are facing one of the most difficult moments in the history of the sector," Miguel Angel Guzman, chief sales officer at Deoleo, told CNBC via email.

"Strong inflation along with high interest rates and unfavourable olive oil harvest forecasts (in terms of quantity and quality due to the drought cycle) has caused prices to increase considerably," Guzman said.

Extra virgin olive oil prices in Spain's Andalusia hit a record high of 9.2 euros, or $9.84, per kilogram in January. They were trading around 7.8 euros as of April 19, according to Mintec's benchmark index, down from about 8 euros at the end of March.

Olive oil prices have cooled due in part to an uptick in production estimates and beneficial rains in March and April.

Deoleo, the maker of household olive oil brands such as Bertolli and Carbonell, said it was convinced the current situation was cyclical and expects a return to a "more reasonable price situation" when future harvest yields return to normal.

Yet, while the recent rain in Spain was "undoubtedly positive news," the company struck a cautious tone on the outlook for olive oil