Olive oil prices have significantly risen over the past year due to various factors, including droughts in major producers like Spain and adverse weather in Italy, Greece, and Portugal, The New York Times reported.
Spain, the world’s largest olive oil producer and exporter, has faced prolonged drought conditions, causing a decrease in production and ensuing shortages. Global olive oil prices have surpassed $9,000 per metric ton.
Severe droughts in Spain have contributed to olive oil shortages and price hikes. Ahmet Abbasi/Anadolu Agency | Getty Images.
Spain’s recent olive oil production plummeted to approximately 610,000 tonnes in the most recent season, a decrease of over 50% compared to the typical 1.3 to 1.5 million tonnes, according to data from market intelligence firm, Mintec, per CNBC.
The shortages and subsequent price hikes have trickled down to consumers, with some brands like Bertolli seeing nearly a 22% price increase in a 750-milliliter bottle of extra virgin olive oil — this time last year, it was $9 and now costs $11, according to data firm IRI, per the NYT.
“It’s not a cheap product, and so that will probably price some of my customers out of that product line in my store,” Michelle Spangler, who owns a shop in Texas and regularly stocks olive oil, told the outlet.
The rising cost of olive oil has had a direct impact on various small businesses, particularly restaurants. Owners like Jesse Shapell, who runs a pizzeria in Brooklyn, told the NYT that he has had to adjust prices due to the soaring cost, begging the question of how much consumers are willing to pay, along with the financial burden affecting his ability to provide quality products to his customers.
“Being a small business already operating with thin margins, the rising cost of an essential ingredient like olive oil creates yet another challenge in bringing high-quality, affordable pizza and cuisine to our community,” Shapell told the outlet.
Related: Thousands of People Caught Trying To Bring Eggs Into The U.S. Amid Price Increases
High Prices Are Leading to Theft
As with anything in high demand and low supply, the desirability of olive oil has caught the attention of criminals. In late August, an oil mill in Spain reported the theft of about 50,000 liters of extra virgin olive oil valued at over €420,000 ($450,000). In a similar incident in August at Terraverne oil mill in Teba, Spain, thieves stole 6,000 liters of extra virgin olive oil worth €50,000 ($53,000), as well as stealing computers, chairs, and tables from the oil mill.
In recent weeks, unexpected thefts of olive oil have also hit Greece. The Polygyros olive oil cooperative and the Mitseas olive mills were both targeted by thieves, with the perpetrators taking about 37 tonnes from Polygyros’ storage, and over 100kg barrels from Mitseas.
Looking ahead, there is no immediate relief in sight. Kyle Holland, an analyst specializing in oilseeds and vegetable oils at Mintec, told CNBC that if the drought continues depleting olive oil stocks, supplies could be exhausted before the usual October harvest.
Orange Juice Also Sees Price Hikes
Olive oil isn’t the only kitchen staple experiencing a surge in prices. The widespread threat of greening disease (a bacterial disease that affects citrus plants) and erratic weather patterns have impacted citrus groves and sparked an uptick in the cost of the juice.
Frozen concentrate orange juice prices have more than tripled since late 2021, the Wall Street Journal reported, and last Friday they reached a new high of $3.91 per pound, up from $2.11 in October the previous year, according to FactSet, per the WSJ.
An orange orchard in Arcadia, Florida. Chandan Khanna/AFP | Getty Images.
The biggest perpetrator in the orange juice price hike is greening disease, which has largely hit Brazil, the world’s largest orange producer, making it difficult to keep up with demand amid the decline in production. But greening disease isn’t just affecting groves overseas. Steve Johnson, a citrus producer in Florida, told the WSJ that he’s seen a significant drop in his yields, going from approximately 500 to 600 boxes of oranges per acre in past harvests to a mere 150 to 200 boxes this year.
“There probably isn’t a tree that’s not infected with greening,” Johnson told the outlet.
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