A shortage of olive oil has fueled a record price spike

[Pelican Press 0]

A shortage of olive oil has fueled a record price spike

Extreme hot weather and persistent drought conditions have dealt a severe ***** to olive oil production in southern Europe, resulting in a significant surge in prices. The effects of these adverse climate conditions have been particularly pronounced in the ********* Union (EU), where countries collectively account for a staggering two-thirds of global olive oil production, alongside a substantial 900,000 tons of table olives.

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A shortage of olive oil, sometimes referred to as “liquid gold,” has driven prices to record highs, fueled a ****** surge and pushed the industry into crisis mode.

The skyrocketing price of the liquid ****, a superfood staple of the Mediterranean diet, has stunned

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and industry veterans alike in recent months.

Kyle Holland, an analyst at market research group Mintec, said

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extreme weather had “significantly impacted” olive oil production in southern Europe in recent years, particularly in Mediterranean countries such as Spain, Italy and Greece.

Spain, which supplies

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of the world’s production according to the Centre for the Promotion of Imports, might typically be expected to produce somewhere between 1.3 million to 1.5 million metric tons of olive oil each harvest, Holland said.

However, official figures showed Spain only cultivated around 666,000 metric tons for the 2022/2023 campaign. Market players surveyed by Mintec expect a production range of 830,000 to 850,000 metric tons for Spain’s 2023/2024 season, an increase of roughly 40,000 metric tons from previous estimates.

Olive oil prices in Spain’s Andalusia stood at 7.8 euros ($8.4) per kilogram as of April 19, according to

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, down from just over 8 euros at the end of March. The decline extends a downward trend, after olive oil prices reached an unprecedented peak of 9.2 euros in January.

I’ll be candid with you, some players we speak to that have been doing this for many years wonder how they are going to carry on.

Kyle Holland

Analyst at Mintec

A dizzying rally for olive oil has cooled in recent weeks, in part due to beneficial rains in March and April and to an uptick in production estimates for Spain’s olive harvest. But analysts said that dwindling olive oil reserves would likely keep markets on edge for sudden price spikes over the coming months.

“I think the biggest concern is effectively the overall supply. People are quite bearish on the market right now, but as the season wears on, and as we get further and further away from the harvest we’ve just had, most market players seem to think that it is going to drain,” Holland told CNBC by telephone.

“The question on people’s lips is yes, prices seem to be going down right now, but eventually people are going to need to start buying. And when you’re buying against diminished volumes, they are saying that if volumes drain and everyone needs to buy, then prices have to go up.”

De Rustica olive oil is poured into glasses for a tasting at the De Rustica Olive Estate on April 29, 2024, close to the town of De Rust, about 450km from Cape Town.

Rodger Bosch | Afp | Getty Images

“This is not normal,” Vito Martielli senior analyst of grains and oilseeds at Netherlands-based Rabobank, told CNBC by telephone.

Martielli said the recent price volatility was like nothing he’d ever seen in his more than 20 years of studying the olive oil sector.

“To have a clear view, I think we need to wait a couple of months until the end of June, but rain in the month of the March was a positive signal for improving production,” he added.

Olive trees ‘exceedingly’ vulnerable to climate change

Helena Bennett, head of climate policy at independent think tank Green Alliance ***, unequivocally attributed the record spike in olive oil prices to climate change.

“The world’s biggest exporter of olive oil, Spain, has halved its production due to drought and extreme heat, increasing its price (at origin!) 112% since 2022,” Bennett

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on social media platform X on April 10.

“It’s happening to other food crops too. Olive oil today, everything else soon.”

In a first of its kind regional analysis of climate-related risks, the ********* Environment Agency

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in March that ********* countries should prepare for “catastrophic” consequences, as the deepening climate crisis hits every part of their economies this century.

The EEA’s report said climate impacts on food production could hit the region hard, particularly in southern Europe, as extreme heat becomes more frequent and precipitation patterns change.

A drone view of a field with ***** olive trees that have ***** after becoming infected with Xylella fastidiosa, near Lecce, Puglia, Italy, on April 1, 2024.

Nurphoto | Nurphoto | Getty Images

Asked how vulnerable olive trees were to climate change, Mintec’s Holland replied: “The word I would use is ‘exceedingly.'”

Holland said, “I think one thing I would say is that players we speak to are extremely concerned, because the climate generally is getting warmer. And a lot of these issues are exacerbated, of course, with more heat, less rain, drier soils, less moisture and

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are also one of these issues that people speculate is only going to get worse.”

He added, “Some players we speak to that have been doing this for many years wonder how they are going to carry on because if you are losing 40%, 50%, 60% of your crop and you still have all the input costs and the fertilizer costs, the tending, weeding, the watering if you can … then the issue is quite critical.”

Olive oil thefts

Rising olive oil prices have also coincided with a spate of thefts.

Supermarkets in Spain said in early March that olive oil had become the most stolen item across large swaths of the country, according to

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. The main culprits were said to be ********* gangs targeting the essential food item for resale on the ****** market.

In August last year, approximately 50,000 liters of extra ******* olive oil was stolen from one of Spain’s oil mills in the Cordoba region, according to

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.

The stolen olive oil was estimated to have been worth more than 420,000 euros at the time.

— CNBC’s Lee Ying Shan contributed to this report.

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EU,Italy,Greece,Climate,Climate change,Spain,Spain government,business news
#shortage #olive #oil #fueled #record #price #spike

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