Olive Oil Prices Rise Due To The Climate Catastrophe
Due to the effects of climate change on olive groves in southern Europe, the world’s center of olive production, one of the healthiest cooking oils is also currently the most expensive.
The world’s olive harvests have been practically halved for the second year in a row due to heatwaves, wildfires, and droughts connected to climate change in major producing countries. This has resulted in record-high olive prices. October saw a record high of $9,000 per tonne for global benchmark retail prices, according to the US Department of Agriculture.
The Spanish government’s August output estimate confirmed the worst-case scenario: a market crisis for olive oil. Droughts and dry weather hit several Mediterranean nations, drastically depleting resources.
Spain, which sets global prices and provides half of the world’s supply of olive oil, predicted in May that production would decrease by about 48% from the previous year. In the largest producer in the world, a harsh summer and wildfires had destroyed a large portion of its crop.
According to traders, the supply shortage is reportedly worse than it was a year ago and is having an impact on households, restaurants, and food markets throughout Europe, the US, and India.
In India, the cost of the imported ultra virgin variety has increased by 22%. Customers at restaurants are probably going to be misled by this, according to commodities dealer Abhishek Agrawal of Comtrade. According to the Indian Olive Association, India uses roughly 12,000 tonnes of olive oil annually, the majority of which is imported.
The Italian government convened a crisis meeting in May in response to political protests sparked by a 20% increase in pasta prices, which was partially caused by higher olive oil prices. Official estimates indicate that Spain’s production in the 2023–24 crop year was around one-third less than the four-year average.
After experiencing high levels of bad cholesterol, Ritu Grover, a banker based in New Delhi, switched to canola oil for cooking and quit using olive oil for salad dressings years ago.
According to a Reuters story published on October 26, which cited Deoleo, the largest olive oil producer in the world, olive oil prices in Spain will stay at record highs at least until June. According to the paper, this will benefit all importing nations, including India.
A fourth less than the five-year average, the US Department of Agriculture has lowered its forecast of the world’s production of olive oil to 2.5 million tons. Experts noted that a string of dry spells and wildfires in southern Europe indicate extreme weather related to climate change.
According to official weather office AEMET, Spain had its third-hottest summer this year, with an average summer temperature that was 1.3 degrees Celsius higher than usual.
In a journal paper published this month, Dorothy Azory, the head of a union of olive growers in southern Europe, stated that “climate change is changing the way Europe grows food.” According to World Weather Attribution service data from the previous year, drought has become at least 20 times more common in Europe due to climate change, with implications for food security on a global and continental scale.
Reliability for its health advantages has been linked to its antioxidant and anti-inflammatory qualities. According to statistics from the St. Louis Fed’s FRED database, which tracks the benchmark Polvoilusdm olive-oil price index, olive oil has been rising for the past few years.
The Polvoilusdm benchmark increased by 89% from $4777 per tonne in October 2022 to over $9034 at present. The global rate was $4331 ton a year earlier. Harvests from Europe typically reach the markets in September and October. Based on FRED data, the previous record was established in 1996 at around $6200 per ton.
The supply outlook appears dire. The scarcity of olive oil is expected to worsen if the present production projections come to pass. We believe that the price of olive oil on the global market will likely soon approach or surpass $10,000 per tonne,” Oil World, a leading industry forecaster, stated in a website update on October 20.
