Global olive oil prices reached a record high in September, surpassing $8,900 per ton due to severe droughts in major producing countries, as reported by the US Department of Agriculture (USDA). The USDA’s latest report states that prices have been steadily increasing ever since the extent of the damage to the harvest became apparent. In fact, the average price in August was 130% higher compared to the previous year. Furthermore, prices in September quickly surpassed the previous record set in 1996, reaching $6,242 per ton.
The price surge is particularly notable in Andalusia, Spain, where olive oil prices soared to €8.45 ($9.02) per kilogram in September, marking the highest price ever recorded for Spanish olive oil. This represents a substantial year-on-year increase of 111%. Spain is the world’s largest producer and exporter of olive oil, followed by Greece and Italy.
The USDA warns that due to supply concerns, olive oil consumption is forecasted to remain stagnant or decline in 2022-23 for every country except Türkiye. In an effort to ensure domestic supplies and alleviate price pressure, the Turkish government recently banned bulk olive oil exports, despite recording record domestic production.
Notably, the USDA has revised global olive oil production for 2022-23 to 2.5 million tons, a 25% decrease compared to the previous year and the five-year average. Additionally, the USDA warns that concerns over production in 2023-24 are exacerbating the price spike, as hot and dry conditions are developing once again in the Mediterranean region.
The surging olive oil prices have even led to incidents of theft. According to CNBC, approximately 50,000 liters of extra virgin olive oil were reportedly stolen from a Spanish oil mill in late August, amounting to more than €420,000 ($450,000) worth of olive oil. Prior to that, another mill reported the theft of 6,000 liters of extra virgin olive oil.
The repercussions of the steep price increase are expected to have far-reaching effects on consumers and businesses alike. The rising prices may render olive oil unaffordable for Spaniards, as per El Mundo. It remains to be seen how this will impact the overall consumption and distribution of olive oil within affected countries and globally.
In conclusion, global olive oil prices have reached unprecedented levels due to droughts in major producing countries. The USDA’s report highlights the steady increase in prices since the extent of the harvest damage became apparent. Spain has particularly experienced a significant price surge, reaching record highs. Consumption is expected to decrease in most countries except for Türkiye due to supply concerns. The USDA also raises concerns about future production due to developing adverse weather conditions. The price spike has even led to incidents of olive oil theft. It remains uncertain how this will impact consumers and businesses in the long run.