Extreme hot weather and persistent drought conditions have dealt a severe blow to olive oil … [+]ANADOLU AGENCY VIA GETTY IMAGES
“Extremely dry weather in much of the Mediterranean” has been blamed for the skyrocketing prices of olive oil—up 130% from last year—by the U.S. Department of Agriculture, which warns the only thing that could bring them down in the coming months would be improved growing conditions.
The Catalonia region of Spain declared a drought emergency in 24 municipalities in August after 30 months of little rain, and the drought has dried up reservoirs, parched olive groves and led to restrictions on water use across the country, per NASA.
The lack of rain has coincided with the nation’s third-hottest summer on record: The Spanish meteorological agency says four heat waves were recorded this summer, temperatures were 2.3°F (1.3°C) higher than normal on average and meteorologists are predicting a warmer-than-normal autumn.
Italy and Greece, which also grow a significant portion of the world’s olives, have also seen hot, dry seasons, with Italy recording temperatures over 40°C (104°F), and Greece, where major tourist attractions were closed due to the heat, notching temperatures just as high.
Spain, the world’s largest producer and exporter of olive oil, made 50% less oil in its most recent season, CNBC reported, and prices have been further impacted by Turkey’s decision to suspend bulk oil exports until at least November 1 in a move meant to ensure domestic supplies and alleviate price pressure.
Before this August, the previous record price for olive oil was set at $6,242 per ton in 1996, according to the USDA.
Picture shows healthy olives grown using an irrigation system developed by researchers of the … [+]AFP VIA GETTY IMAGES
610,000 tons. That’s how much olive oil Spain produced in the recent season, compared to a usual yield of 1.3 to 1.5 million tons.
The global olive oil market was valued at $14.2 billion in 2022 and is projected to grow to $18.4 billion by 2030, Fortune Business Insights predicts. Spain manufactures almost half of the world’s olive oil, followed by producers in Italy, Greece, Portugal, Tunisia, Turkey and Morocco. Greeks are the largest olive oil consumer per capita, according to the North American Olive Oil Association, followed by Spain and Italy. Greeks consume about 20 liters of olive oil per person each year, compared to about 1 liter per American. The size of the United States compared to other nations, however—only about 10.6 million people live in Greece compared to 331 million in the U.S.—makes the nation a major consumer: The USDA said American imports usually make up about 30% of the global olive oil trade, and that number is expected to rise to between 35% and 37% this year.
A theft of about 50,000 liters of extra virgin olive oil left one of the nation’s family-owned mills, Marin Serrano El Lagar, out about $450,000, local news reported. No arrests have been made in the theft and a spokesperson for the Civil Guard told El Mundo that stealing in bulk, rather than bottles, makes tracking the oil particularly hard. Just two weeks before that, another 6,000 liters of extra virgin olive oil—$53,500 worth—was stolen from the Terraverne oil mill.
Olive oil isn’t the only commodity to have seen cost jumps this summer, Business Insider reported. Cocoa, orange juice, wheat and soybeans all surged this summer as heavy rainfall and disease impacted West Africa’s cocoa supply, a crop disease hit citrus plants in Florida and Brazil and Russia pulled out of the deal allowing the export of grain from Ukraine. Soybean prices also soared this summer after the USDA reported much lower-than-expected soy plantings.