What's happening to olive oil prices - and why?
Wholesale extra virgin olive oil prices trading in September 2023 more than doubled worldwide, compared with one year ago. European prices were 4 euros/kg in September 2022, but by July 2023 had shot up to 7euros/Kg and have continued to rise. In November 2023 - with the onset of the latest harvest, prices have reached an all-time high. Ex-factory prices in Greece are >10 euros / Kg for extra virgin, (~12 euros for organic) - and that is before filtering, bottling and transport. Such increases are not limited to extra virgin olive oil - prices for all qualities of olive oil have risen. In the UK the price of a bottle of olive oil had climbed by 50% by March 2023 and is now more than double what it would have cost a year ago.
Causes of increase in Olive Oil Prices: and implications for the future
1. Poor crop yield due to climate change
By far the most important cause for the rise in prices is a reduction in crop yield across the largest olive oil producing countries. Olive oil, particularly of the best quality, is now very scarce! It is truly Liquid Gold.
The EU produces two thirds of the world's olive oil, with Spain being the biggest producer, followed by Italy, next Greece and finally Portugal. All have suffered a massive fall in production in 2023 compared to 2022: SPAIN (-56%), ITALY (-27%), Greece (-42%) Portugal (-39%).
The causes for this fall in production lie firmly with Climate Change and unfavourable weather conditions.
- Soaring temperatures: Throughout the summer 2023 southern europe was hit by unheard of heatwaves, with temperatures soaring to 45C in some places;
- Drought: lack of rainfall and low levels of ground water have rendered the trees parched resulting in deficient flowering of the buds and reduction in fruit formation (minimal vegatative growth)
- then when rain fall has come, it has been brief and insufficient quantity to 'wash' the flowers of the coating of dry dust: the result being that the fruit formation suffocates.
- In the smost southern areas, this has been aggravated by high winds bringing sand and dust from the Sahara, which has smothered the trees.
- Forest fires have in some cases destroyed olive groves
All of these factors combined to cause a very low production campaign for olive oil in 2023, particularly on the top olive oil production countries:
2. Labour and supply costs more than doubled
Other factors which have contributed to the increased prices are higher costs of labour, need for loans due to reduction in sales, with increased interest rates. All of these factors contribute to a downward spiral.
IMPACT, RISKS AND REPERCUSSIONS
Escalating prices have triggered an increase in olive oil thefts, and even olive branches and centuries-old trees. Chain-saw wielding gangs are scouring olive groves to capture the scarce fruit for olive pressing, leaving farmers devastated.
Olive Oil Fraud and Adulteration:
There has always been a huge (under-recognised) problem with adulteration of olive oil. In fact adulterated olive oil is now the biggest source of agricultural fraud in the European Union and this will increase further with the latest price inflations.
Such adulteration occurs not only with olive oil of poorer quality, but sometimes with oil that is not even from olives at all! In some cases, lampante, or "lamp oil," - which is made from damaged olives fallen from trees, is used, even though it is not legal to sell it for consumption. One fraud ring is believed to colour low-grade soy oil and canola oil with industrial chlorophyll, and flavoring it with beta-carotene. his explains why although less than 10% of world olive oil production meets the criteria for labeling as extra-virgin, around 50% of retail oil is labeled "extra-virgin"! In some cases, lampante, or "lamp oil," - which is made from damaged olives fallen from trees, is used, even though it can't legally be sold as food. Some supposed "olive oils" are adulterated with low-grade soy oil and canola oil coloured with industrial chlorophyll, and flavoured with beta-carotene. In some cases, less than half the oil in a retail bottle is actually olive oil!
Whereas Crete and the southern Peloponnese are famed for the quality of their oil - nearly 95% is extra virgin at source, and naturally the price is going to be higher.
For a full and entertaining description of the problem I highly recommend Extra Virginity by Tom Mueller and .....
How do you know you are getting the quality you pay for?
First piece of advice - don't be fooled by 'bargain' extra virgin olive oil: It is probably fake or old!
Always check that the container label contains information regarding:
1. Criteria for classification of olive oil: acidity, peroxide level
2. Year of harvest
3. Source of olives (country, region)
4. Variety of olives
5. Production facility - where have the olives come from? Private estates and PDO/PGI olive oil is usually a safe assurance that you are getting what the label says.