The price of olive oil has reached record levels as severe droughts in producing countries have caused a decline in supply, leading to a rise in cooking oil thefts. The global price of olive oil has reached $8,900 per ton in September, driven by extremely dry weather in the Mediterranean. The average price in August was already 130% higher compared to the previous year, with no signs of improvement.
Spain, the world’s largest producer and exporter of olive oil, has been hit hard by an intense drought that has persisted for months. The country has experienced its third hottest summer, with temperatures 1.3°C higher than normal. As a result, Spanish olive oil production for the recent season has fallen by more than 50%, reaching around 610,000 tonnes compared to the usual 1.3 to 1.5 million tonnes.
Italy and Greece, the second and third largest producers respectively, are also facing a reduction in production due to prevailing drought conditions. Concerns surrounding these droughts and reduced production in other European olive oil producing countries are contributing to the complexity of the situation.
High prices for olive oil, known as “liquid gold,” have led to an increase in thefts. In September, the price of olive oil in Andalusia, Spain, reached €8.45 per kilogram, marking the highest price recorded for Spanish olive oil. This has led to thefts of significant quantities of olive oil, with one mill losing over €420,000 worth of olive oil and another mill losing 6,000 liters worth €50,000.
The situation is expected to worsen as olive oil stocks continue to decline due to drought, which could lead to a depletion of reserves before the arrival of new harvests in October. Turkey’s decision to suspend bulk exports of olive oil has further complicated the situation, exacerbating already limited volumes in Spain.
Overall, the combination of severe drought, reduced production, rising prices and increased theft has created a challenging situation for the olive oil industry. It remains to be seen how long this crisis will last and what measures can be taken to mitigate its impact.
Definitions:
– Drought: A prolonged period of abnormally low rainfall, leading to a shortage of water supply.
– Olive oil: A type of oil obtained from olives, commonly used in cooking and as a salad dressing.
Sources:
– United States Department of Agriculture
– AEMET (State Meteorological Agency)
– Mintec (commodity market intelligence company)
– International Olive Council
