In 2024, the combination of climate challenges and international trade restrictions will cause the cost of this essential product, olive oil, to increase significantly.
Unprecedented rise in olive oil prices
The new year has brought an unexpected and sharp rise in olive oil prices. At the heart of this increase are Andalusia and Spain, two key players in the global olive oil market. Andalusia is currently experiencing a severe drought, which is exacerbating the problem. Türkiye, the world’s third largest producer of olive oil last year, has imposed export restrictions. Both problems contributed significantly to market instability.
Price rise in Jaen, Spain
In Jaen, the heart of Spain’s olive oil production, the price of extra virgin olive oil (EVOO) reached a staggering €9 per kilo. This represents an increase of 20 per cent and marks a significant change from the price falls observed between October and November.
The bottlers’ association Anierac points out: “Olive oil by origin in rural areas has become twice as expensive in factories and supermarkets as in previous years.
Historical price increases
When current prices are compared with those of previous years, the increase becomes even more striking. EVOO in Jaén is now 70 per cent more expensive than a year ago, and a staggering 260 per cent more expensive than two years ago. This price increase is particularly significant given the price point of €2.1 per kilo in the pandemic year of 2020.
Changing regional dynamics
The olive oil industry is witnessing a shift in the traditional strongholds of production. Castilla-La Mancha is emerging as a major producer, leaving behind regions such as Granada and Málaga. This change is reshaping the landscape of the Spanish olive oil market.
Drought in Andalusia and Catalonia poses a significant threat to olive oil production, with speculation of potential shortages affecting market prices. The recent increase in drought warnings has added to these concerns.
International market exchanges
Türkiye’s decision to restrict exports to the European Union has significantly reduced European imports of Turkish olive oil by 55% on an annual basis. This, combined with changing production trends in countries such as Portugal, Italy and Greece, is reshaping the global olive oil supply chain.
As the world grapples with these challenges, the olive oil market is at an inflection point. Climatic conditions, international trade policies and changing production dynamics are all influencing the future of this commodity, affecting both consumers and producers.