According to Gregor Christiaans, president of the Olive Oil Foundation Netherlands, there are two other reasons, besides weather conditions, responsible for the increase in the price of olive oil. These are the higher production costs and high global demand. “It’s a toxic cocktail,” he says.
Spain
Spain, the world’s largest olive oil exporter, is particularly affected by drought and high temperatures. April was the hottest month ever and the country experienced a dry winter. Olive oil production was down 50 percent last season compared to the previous year, Christiaans says.
Where Spain differs from Greece and Italy is that 70 percent of Spanish olive growers are members of a cooperative. These are olive oil producers who produce significant volumes of olive oil using large machines. These volumes are then sold to major buyers, such as Bertolli. “Those farmers aren’t just going to go bankrupt,” Christiaans says. But he expects this will be different for small farmers.
“It’s a poisonous cocktail”
Another country where production was lower than the previous year is Italy. Production dropped by 30 percent, Christiaans says.
Bloomberg calculated that the total amount spent on making a classic Italian Margherita pizza increased 14% in June compared to a year earlier. Rising olive oil prices during that period by nearly 27 percent contributed to this, Bloomberg reports.
Christiaans is looking for a solution to the higher demand over supply of olive oil to China. He hopes the Chinese will start producing olive oil, so as to dampen the demand a little more.