The year 2023 was another challenging one for the production of extra virgin olive oil across Southern Europe and North Africa. After several years of low rainfall, the past year saw almost no precipitation. Additionally, the long summer was characterized by excessively high temperatures. The year 2024 also got off to a poor start, with temperatures in Southern Spain reaching around 30°C in January. Fortunately, February was cooler, bringing much-needed rain.
These extremes in the Mediterranean region resulted in a significantly lower olive harvest. With insufficient rainfall, an olive tree reacts by [1] producing fewer olives and [2] yielding smaller olives. The consequence is clear: smaller olives produce less olive oil.
The problems are compounded by rising inflation, which has increased costs for transport, energy, and labor. On average, a bottle of extra virgin olive oil in Dutch and Belgian supermarkets is now up to 50 percent more expensive than at the beginning of 2023.
You might shrug and say everything has become more expensive, but the price increase for olive oil is extreme. To put it in perspective: the overall price level of groceries has increased by an average of 20 percent over the same period. While that's no small increase, it does highlight the extreme price rise of extra virgin olive oil. And no, the supermarket is not making much profit from olive oil.
A Bottle of Extra Virgin Olive Oil Is More Expensive
According to figures from the European Commission (EC), the bulk prices of extra virgin olive oil have risen by 60 percent in Spain, 50 percent in Italy, and a staggering 80 percent in Greece within a year. After two years of poor harvests, the existing stocks are now depleted.
However, olive farmers themselves hardly benefit from the higher prices. They cannot easily increase their production, yet their higher costs persist.
What the olive groves need is consistent rainfall throughout the year.
Last year's harvest was a third lower than normal, and prices have already doubled. We might need to acknowledge that olive oil is almost a luxury product again, one we should use more sparingly.
But that's only part of the problem. Olive oil is recommended in the media everywhere, leading to increased global consumption while availability decreases. The law of supply and demand in this case results in significantly higher prices.
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