New record in olive oil prices

Olive oil prices have multiplied by 4 in the last 3 years due to extreme heat and drought in southern European countries, where the largest production of olive oil in the world occurs.

Climate change, temperatures above seasonal norms and low rainfall negatively affect olives and other agricultural products.

Especially in the European countries neighboring the Mediterranean, the dry and hot summer season causes a decrease in the production of olives and olive oil.

2/3 OF OLIVE OIL PRODUCTION IS CARRIED OUT IN THE EU

The countries of the European Union (EU), which produce about two-thirds of the world’s olive oil production, are suffering from severe weather conditions in the recent period.

According to EU data, about 67 percent of the world’s olive oil production is carried out by the member countries of the Union.

There are approximately 4 million hectares of olive groves in the EU countries around the Mediterranean. EU countries produce about 2 million tons of olive oil and 900 thousand tons of table olives annually from here.

LARGEST PRODUCER IN SPAIN

Spain ranks first in olive oil production among European countries. This country produces more than half of the EU’s olive oil production in normal periods. Spain is followed by Italy, Greece and Portugal.

While 5 years ago the production of olive oil in Spain stood at the level of 1 million 790 thousand tons, in the last harvest period, 2022-2023, production fell to about 1/3 of this figure.

Although Spain’s olive oil production was at the level of 1 million 491 thousand tons in the 2021-2022 period, it decreased by more than half in the 2022-2023 harvest period.

Spain’s olive oil production decreased by 56 percent in the 2022-23 period compared to the previous season and dropped to 663 thousand tons.

Olive oil production in Italy, which was 329,000 tons the year before, decreased 27 percent last year to 241,000 tons. Similarly, olive oil production in Portugal, which was 206 million tons in the previous year, decreased by 39 percent to 126 thousand tons.

Among Europe’s top olive oil producers, only Greece’s production rose 47 percent compared to the previous year, going from 232,000 tons to 340,000 tons.

DECREASED PRODUCTION

Total EU olive oil production decreased from 2 million 272 thousand tons in the period 2021-2022 to 1 million 379 thousand tons in the period 2022-2023.

Thus, compared to the previous year, the decrease in the production of olive oil in the countries of the Union was 39 percent.

The serious drop in olive oil production negatively affected the sector and prices.

Due to declining supply and continued strong demand, olive oil prices have started to rise rapidly in the last period, breaking record after record.

According to IMF data, the price of olive oil on world markets exceeded the last record set in 1996 in May.

The price increase also continued after May.

Rising fertilizer costs along with high interest rates and inflation contributed to the rise in the price of olive oil.

According to data from Infa Oliva, which monitors prices in the sector, the price per liter of extra virgin olive oil, which in August 2020 was 1.86 euros, has reached 7.82 euros this month. Thus, the price of olive oil has increased more than 4 times in the last 3 years. In this period, the increase in olive oil prices reached 420 percent.

The price of extra virgin olive oil was at the level of 3.7 euros in August of last year.

The price increase in the last 12 months has more than doubled. In the last year, olive oil prices have risen 210 percent.

PRICES THAT INCREASE EVERY DAY: REACHED 8 EUROS

Speaking to Anadolu Agency (AA) about the increase in olive oil prices, Spanish agricultural expert Juan Vilar said: “There is an unprecedented situation in olive oil at the moment. Current olive oil prices will never have been reached before.” he used the phrase.

Pointing out that olive oil prices in Spain are increasing every day, Vilar stated that the price of olive oil in some regions of the country has reached 8 euros.

Recalling that last year’s olive oil production did not cover the demand, Vilar emphasized that the gap between supply and demand was closed with the stocks that remained from the previous period, but these stocks were also depleted.

Pointing out that the next campaign is expected to be weak in terms of olive production, Vilar said that in this case, the only way to adapt to demand is to increase the price.

Recalling that prices per liter of olive oil were at the level of 1.8 euros 3 years ago, Vilar stated that prices in supermarkets in Spain increased more than 4 times and reached 9 euros.

Pointing out that the annual world demand for olive oil is 3.1 million tons, Vilar recalled that production remained at 2.6 million tons and there was an imbalance between supply and demand.

For this reason, Vilar added that he expects the rise in the price of olive oil to continue.

PRODUCTION CANNOT MEET CONSUMPTION

The Madrid-based International Olive Council, which brings together olive-producing countries, forecasts a world consumption of olive oil of 3 million 55 thousand tons and a production of 2 million 730 thousand tons in the 2022/23 campaign.

The difference between consumption and production must be closed from stocks. The decrease in stocks and excess consumption contribute to the increase in the price of olive oil.

The fact that Europe was the continent that warmed the fastest last year, and that it experienced record temperatures in the summer of this year, is a blow to olive production.

Furthermore, negative expectations for this year’s harvest are causing higher olive oil prices. (AA)