Coinspeaker
Olive Oil Prices Spike to Record Highs amid Drought-Induced Supply Crisis
Olive oil, a staple in kitchens around the world, has recently become the center of attention due to an unprecedented surge in price. As severe droughts plague major olive-producing countries in the Mediterranean region, supplies are dwindling.
Drought’s Grip on Olive Production
The United States Department of Agriculture (USDA) highlighted in a recent report that in September, global Olive oil prices reached an astonishing $8,900 per ton, a historic high that has sent shockwaves through the industry. This surge is largely attributed to the prolonged dry weather conditions that have severely impacted Olive production in the Mediterranean.
The Mediterranean region, comprising countries like Spain, Italy, Greece, and Tunisia, has long been the world’s leading producer of Olive oil. However, recent years have seen increasingly severe droughts, disrupting the delicate balance of olive cultivation.
The droughts have hit Olive groves hard, leading to a significant reduction in olive yields. Olives require a delicate balance of moisture and sunshine to thrive, and the ongoing drought conditions are severely curtailing this balance.
The magnitude of the current price surge is astounding. August prices averaged 130% higher compared to the previous year. Even more concerning is that this surge shows “no sign of easing”, as reported by the USDA.
Spain, renowned as the world’s largest producer and exporter of Olive oil, is grappling with an unprecedented crisis. The drought has left Olive groves parched and Olive trees struggling to bear fruit. Adding to this crisis, Spain recently recorded its third hottest summer, with average temperatures soaring 1.3°C above normal, as reported by the state meteorological agency, AEMET.
According to Mintec, a commodity market intelligence agency, Spain’s olive oil production in the most recent season fell to around 610,000 tonnes. This represents a startling 50% reduction from the average annual output of 1.3 to 1.5 million tonnes.
Similarly, the global rice market is currently under pressure as China, the world’s top rice producer, deals with severe rain and flood concerns in its grain-producing north-eastern area.
The Great Olive Oil Heist: A Consequence of Surging Price
Mintec further highlighted that olive oil prices in Spain’s Andalusia soared to levels not witnessed in over two to three decades. This remarkable price of €8.45 per kilogram represents a staggering year-on-year jump of 111%. To put this into perspective, the price of Spanish olive oil has never been this high in the past 20 to 30 years, based on Mintec’s historical data.
Such unprecedented prices have proven to be an irresistible lure for thieves, who have capitalized on the olive oil craze by targeting mills and storage facilities.
One particularly audacious heist took place on August 30, where approximately 50,000 liters of extra virgin Olive oil were stolen from the Marin Serrano El Lagar oil mill. This audacious act amounted to a loss of more than €420,000 (approximately $450,000) for the family-owned business. Shockingly, no arrests have been made in connection with this crime.
This incident was not an isolated case. Shortly before that, thieves pilfered 6,000 liters of extra virgin Olive oil valued at €50,000 from the Terraverne oil mill.
Olive Oil Prices Spike to Record Highs amid Drought-Induced Supply Crisis
