Why has the price of olive oil exploded?

Since the war in Ukraine, in France and the rest of Europe we have experienced a surge in the prices of all products. Inflation has affected all product categories, especially everyday products like flour, vegetables and olive oil.

However, the price of Spanish olive oil began to soar well before the war in Ukraine. In 2019 the price of olive oil in Spain was €3.35/liter on average. In 2021, it already exceeds €4.1 per liter. But it was from the war in Ukraine that it exploded to reach more than €10/liter. This equates to more than 165% increase since 2021.

What are the causes of this increase?

Weather conditions :

The climate is very important for the production of olive oil. If there are drastic changes such as droughts, hail, etc., there may be a drastic reduction in olive production, and therefore a lower supply in the market for olive oil production. olive. For Spain, the drought has caused the most destruction. Which partly explains the escalation of prices.

Increasing demand:

The consumption of olive oil from Spain is increasing throughout the world, due to its excellence and its health benefits. Increasing demand without increasing supply also increases prices.

Production costs :

Olive oil production costs have been increasing for years, mainly since the war in Ukraine. The cause is phytosanitary products and fertilizers, which are experiencing very significant increases. This implies an increase in production costs which can also be combined with an increase in labor costs.

Speculation on the markets:

A final cause of the increase is financial speculation in commodity markets. Investors can look for opportunities by buying olive oil and reselling it a few months later. This can generate great volatility in prices.

Which olive oil to buy?

For the consumer, the choice of olive oil is more complicated. Prices have risen so much that it is difficult to choose a good olive oil. You can choose between olive oil blends that are mainly available in supermarkets, oils with origins from Greece, Tunisia, Italy or Portugal.

Prices for Spanish olive oil are currently around 10 euros for a liter of standard extra virgin olive oil, while for quality olive oils the price rises to over 16 euros per liter.