Olive Oil Prices Surge, Fueled By Severe Drought In Spain

The prices of olive oil have hit historical levels in 2023, making this year’s prices the highest in 26 years for the popular oil that is considered one of the healthiest.

Spain, a key producer of olive oil, has suffered a long drought that has triggered a massive shortage that is significantly responsible for the current steep rise.

A kilogram of the oil so much loved around the world, is now retailing at around  US$ 6 per kilogram or even more in some cases. 

According to Selina Wamucii’s global food price analysts, the high prices of olive oil are likely to hold steady for some time. See the latest updates of prices of olive oil in the US

This is clearly understandable because the extreme weather conditions in Spain are still on the extreme, literally speaking. The current harvest of Spanish olives stands at 50% less than normal, a consequential reduction indeed. From a normal high of about 1.5 million tonnes in annual harvest, the current season’s harvest was just about 600,000 tonnes.

For 36 months non-stop, Spain received less than normal rainfall. The Ministry of Ecological Transition puts the reduction at 36%. In April, for example, temperatures rose above normal for almost the entire month – safe for one week only. Some parts of the country like the Canary Islands experienced extreme temperatures of up to 38ºC. Generally,  March was rated as dry or very dry across the entire Spain. 

Another factor that is pushing up the olive oil prices is the intense shortage of sunflower oil, which has led to an equally intense demand for alternatives, and olive oil happens to be a key alternative. The ongoing war between Russia and Ukraine caused a worldwide shortage of sunflower oil, and many would be consumers of sunflower oil turned to olive oil.

As prices skyrocket, consumers are finding clever ways to help them not spend more on the olive “gold”. Some are reducing the amount they use per cooking, while others are trying less costly oil varieties. But seeing as olive oil is considered healthy compared to many other typical oils, these measures may not solve the crisis in households.

But things may change if bumper harvests in Greece and Turkey are anything to go by, with estimates showing that the two countries may export significant amounts that could hopefully help to adjust the prices downwards.

Spain is the world’s largest producer of olive oil, followed by Italy, Morocco, Turkey and Greece. In the 2021 season, for example, Spain exported olive oil worth $230M to various countries. Morocco is now emerging as the fastest growing producer of olive oil in the world. 

Italy, the United States, the United Arab Emirates, and Saudi Arabia, are some of the top importers of olive oil from Spain .

The United States imported $21.8M worth of olive oil from the European country. In total, the US imported 375,000 tonnes of the oil from Spain and other countries – according to a report on Statista.