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The Surge in Olive Oil prices explained

With olive oil prices reaching levels not witnessed in almost three decades, we aim to shed light on the reasons behind this surge and address inquiries from both trade and retail customers.

The Story so far

Up to this point, we are all familiar with the high inflation rates affecting various food items. However, olive oil is experiencing unique factors contributing to its bulk price surge from approximately 3 euros per litre in July 2021 to 5.70 euros per litre in July 2022. This increase, reminiscent of 1997 prices, translates to a substantial 60% hike on the retail shelf between January 2022 and April 2023.

The Spike in Prices

Since April 2023 the price has increased two fold to an average of 8-10 euros a litre at this moment across all the main production regions of Spain, Greece and ItalyThe escalation in prices began in early 2022 due to a winter drought in Spain, foreshadowing a poor harvest later in the year. Insufficient rainfall in October and November further exacerbated the situation, resulting in only half of Spain’s usual olive oil production for the 2022/2023 harvest. Spain, being the largest global producer accounting for over 40% of olive oil, significantly influences the entire market. The Greek olive oil market is particularly impacted also, driven by Italian traders who blend Greek oil with Spanish and Italian varieties, ultimately shaping international prices.

Challenges in Fixing Prices

Questions often arise about setting prices at harvest. However, the bulk oil market and the structure of olive production in Greece, with fragmented groves owned by numerous smallholders, make it challenging. Payment for olives is typically based on global market prices at the time of olive oil sales rather than predetermined rates at harvest.

“The time of quality olive oil sold below cost is finally over. It is crucial to help the consumers understand how significant it is to consume quality extra virgin olive oil and how important it is to pay its fair price, which is the current price.” (David Granieri, president of Unaprol, Italy’s national producers’ association) – source: Olive Oil Times: 20.11.2023

This Year’s Harvest and Long-Term Outlook

Continued drought in Spain, especially during March and April, has led to further price increases. Greece, too, is anticipated to face a smaller harvest due to a combination of factors, including a warm winter, pests, and a wet spring. Climate change-induced weather patterns pose a long-term threat to olive oil production, potentially shifting suitable areas over time.

What Can be Done?

Unfortunately, there is limited recourse to counter rising olive oil prices. However, acting promptly to purchase olive oil before further increases is advised. Maintaining transparency and traceability, buying from reputable sources, and being cautious of unusually low prices are essential steps to ensure the authenticity and quality of the purchased product.

“We need to make consumers understand that this product is worth more because it delivers more in terms of well-being and taste. If we examine the actual extent of the price increases, it amounts to just a few cents more per day. Our health is certainly not worth so little,” he added.” Granieri said.

The final word. Investment in your health

Despite the recent price surge, it must be stressed that olive oil remains a fantastic and sustainable food source. It is much more than a simple condiment. It is a true elixir of health, and it should be communicated and perceived as such, highlighting how unique it is compared to other fats and condiments. This is part of our continued mission to inform and educate oiur readers and followers the importance of not compromising on quality of choice.