This year we have seen a surge in the price of extra-virgin olive oil and many people are asking why. The short version is that Europe has faced droughts for the past three years which has resulted in worsening harvests of olives. Particularly Portugal, Spain and Greece, which are large producers of EVOO, have seen reduced harvests and the lower supply has driven the prices up.
To expand, there are two major reasons the price of extra virgin olive oil has increased.
- Environmental Challenges
Southern Europe, particularly Spain and Italy, which are among the world’s largest olive oil producers, have experienced extreme weather conditions. Prolonged droughts, unseasonal frosts, and heatwaves have significantly reduced olive yields.
In Spain, for example, the olive harvest has dropped by about 50% compared to the previous year due to one of the worst droughts in recent history.
Italy has faced challenges with both drought and the spread of an olive tree-killing bacterium further crippling production. While olive oil prices have decreased from the record highs reached in mid-January, they remain far above the average for the previous five years.
- Economic and Supply Chain Issues
Economic factors and supply chain disruptions have also played a critical role. The COVID-19 pandemic, which began in 2019, continues to have lingering effects on global supply chains. Labor shortages, increased transportation costs, and logistical bottlenecks have all contributed to higher production and distribution costs for olive oil. Inflation globally has driven up the costs of related items such as fertilizers, packaging, and energy, compounding the issue.
We have been able to almost hold our retail prices this year with a nominal $1-2 per 200ml-375ml-750ml bottle and will continue to offer the very best quality we can – from Spain, Italy, South Africa, Peru, Chile and more – at the most competitive prices possible. In the Mediterranean looking ahead to the 2024/25 crop year, which begins in October, ministry officials are optimistic that Spanish olive oil production will return to normal.
And that’s a great sign!
