The Economist recently highlighted a startling rise in olive oil prices, signaling a complex issue rooted in climate change and reduced production.

The Mediterranean’s ideal climate for olive trees has been disrupted by climate shifts, impacting traditional cultivation practices. This, coupled with increased global demand due to olive oil’s recognized health benefits, has led to a scarcity.

In September, prices reached historic highs, surging by 117% annually according to the International Monetary Fund. The value of olive oil became 17 times higher than that of an equivalent weight of crude oil. In 2019, it was seven times cheaper.

Spain, the largest olive oil producer globally, faced extreme weather conditions, damaging olive crops. Unprecedented drought in certain Spanish regions significantly damaged crops. While olive trees don’t require much water, excessive heat during May’s fruiting season becomes detrimental. This precisely happened in 2023, driving prices up since summer, as explained by agronomists and growers.

Similar adversities hit Italy, where a destructive bacterium devastated olive groves.
Additionally, Turkey, one of the few countries with a good production year, restricted bulk olive oil exports to keep domestic prices low, stabilizing prices internally but raising them elsewhere.

These calamities slashed EU olive oil production by 40%, triggering price hikes. Opportunistic individuals have even resorted to theft and adulteration, jeopardizing consumer health. Occurrences of theft were recorded in Spain and Greece, where olive growers resorted to installing tracking chips on their trees and organizing patrols in fields to protect their harvests.

Looking ahead, the situation appears dire. Projected yields for the next harvest are estimated to drop significantly, further exacerbating the shortage.
Consequently, olive oil has transitioned from a kitchen staple to a luxury item, with prices soaring globally.

As the crisis deepens, it remains uncertain how consumers and markets will adapt to these changes in olive oil availability and pricing.