Long-term drought in Spain and Italy has sent olive oil prices to 9 Euros ($9.71) a litre in the most affordable stores.
At the same time, police in Greece, Spain and Italy have cornered counterfeiters selling ordinary oil as extra-virgin.
The root for the skyrocketing price and counterfeiting lies in Spain’s dominance of the product. Producing 70% of global olive oil, Spain calls the shots and olive shortage in the country creates a chain reaction worldwide.
The world’s largest olive oil press, Spain’s Nuestra Senóra del Pilar, has already reported a 2023 production maximum of 35 million kg. This follows the low harvest of 24 million kg of olives in the 2023 season by the cooperative that supplies the factory.
A BBC report which quotes Cristóbal Gallego Martinez, who heads the Nuestra Senóra del Pilar cooperative, underlines the shortage. He says that high fuel, electric and fertiliser expenditure has also impacted the price of olive oil.
Changing Weather Edges Productivity
A leading factor for the price surge is low olive supply from prolonged drought amid changing Mediterranean weather patterns.
The region usually espouses balanced weather patterns of rain, drought and intermediate spells. These balanced conditions make Mediterranean countries produce 95% of world olive production, reports UN’s Food And Agriculture Organisation (FAO).
This time round, however, temperatures in the Mediterranean have been increasing 20% quicker than the world’s average. The United Nations Environmental Programme (UNEP) also cites a population of 510 million and farming activities as adding pressure to nature.
Extra Virgin Sales Down
Amid this shortage, sales of extra-virgin olive oil in Spain have plummeted while those of the cheaper olive oil have risen.
Sales of extra virgin fell by 11% in the first 9 months of 2023, while olive oil prices rose by 63%. Since extra virgin accounts for 50% of all olive fats and oils that Spain produces, sellers are feeling the pinch.
The crux of the matter is the phenomenal rise of price at origin. In October 2023, the price doubled to 8.32 Euro ($8.97) from the 4.16 Euro ($4.49) per litre of October 2022.
Counterfeiters
Given the pricey nature of the edible product, police in Italy and Spain have had to impound counterfeit olive oil.
On December 4, authorities in Spain and Italy spilled 5200 litres of olive oil that sellers were passing as extra-virgin. The operation uncovered a cartel that was seeking to infiltrate the world market with the adulterated product.
Europol police force blamed the activity on rising consumer inflation, high global demand amid low production. Other global producers including South Africa and Argentina usually conclude their olive harvests in October, which makes year-end supply wanting.