Olive Oil Prices Are On Their Way Up. Climate Change Might Be The Reason
Inflation has hit many areas of the food production industry, with rising costs affecting everything from eggs to fruit to bread. Shoppers can expect to pay a little more during grocery store trips, even if they aren't getting any extra foods.
Many consumers turned to using olive oil in the kitchen after the Russia-Ukraine war cut down exports of Ukraine's sunflower oil. Olive oil's versatile flavor makes it a great companion for cooking a variety of dishes, or for use in many baked goods. But while olive oil may have been a great substitute up until now, customers may see less of it on grocery store shelves — and higher prices for the bottles that are available.
Back in August 2022, heatwaves and extreme droughts hit Spain, disrupting olive oil production. (The country produces nearly half of the world's olive oil, followed by Italy and Portugal.) Spain reportedly produced 50% less olive oil than it has in previous years — around 800,000 tons, as compared to 1.5 million in 2021.
Reduced crops lead to higher costs
Olive oil companies have been facing production challenges, thanks to the droughts and heatwaves disrupting growth. Worldwide, production is projected at around 2.6-2.7 million metric tons of olive oil. A typical good harvest, meanwhile, is roughly 3-3.1 million metric tons. This will lead to roughly 20% less olive oil available on store shelves, and, ultimately, higher costs for the in-demand products.
However, the environmental challenges may mean that the olive oil available to purchase could have a slightly different taste. Heatwaves and droughts can impact the quality of the crops, and companies may need to import olives from other producers, creating a combination for the oil. Italy's Filippo Berio brand is reportedly implementing initiatives that will keep olive oil's quality consistent.
Prices for the olive oils available on store shelves could go up by as much as 30 to 50%. Some places are already seeing the effects — Spain has been paying six euros (roughly $6.33 USD) per kilo of olive oil since December, according to The Brussels Times. Unfortunately, it looks like this cost increase will spread across the rest of the world until production returns to its normal figures.