According to the IMF, world prices for olive oil rose to a 26-year high of $5989.8/t amid a prolonged drought in Spain, which is the largest producer and exporter of this product.
Mintec experts said that due to unfavorable weather, Spain harvested 50% less olives than usual from October 2022 to February 2023, resulting in the production of olive oil decreased from the usual 1.4-1.5 million tons to 630 thousand tons.
The Spanish Ministry of the Environment reports that the amount of precipitation in March was only 36% of the average monthly norm, and in general, the country has been experiencing a precipitation deficit for 36 consecutive months.
Global shortage
“The drought in Europe, and especially in Spain, has led to a global shortage of olive oil, the demand for which has grown significantly in recent years,” the Australian Olive Oil Association notes, “Prices began to rise in 2020 as people began to cook more often at home during the covid-19 pandemic. Due to the shortage of sunflower oil that arose amid the war in Ukraine, the demand for olive oil increased even more, but now it has begun to decline as consumers have begun to use olive oil more sparingly or switch to other types of vegetable oils.
However, the basic demand for healthy and natural olive oil will remain at any price, experts say. “If the rainfall does not increase, prices for olive oil will remain at or exceed the record level of €5/kg until the 2023/24 MY harvest.
Rising prices for olive oil may lead to higher prices for high oleic sunflower oil, which has similar quality characteristics. The main value of high oleic oil is the high content of oleic acid (up to 90%), while olive oil on average contains 71% oleic acid and is 3-4 times more expensive.