Why is olive oil so expensive?

Why is olive oil so expensive right now?

Spain, Italy and Greece produce more than 60% of the world’s olive oil. Anything that affects prices in these countries will have a domino effect around the world. For example, when the cost of extra virgin olive oil (EVOO) in Spain reached an unprecedented €902.5 per 100kg in January, the impact was felt worldwide.

Shoppers in Britain now pay £7.80 for a liter of ‘white label’ EVOO (such as Tesco or Sainsbury’s own brand), while premium brands fetch up to £16 per litre. Normal or ‘classic’ olive oil prices are not much lower; the Office of National Statistics found that these have more than doubled since 2018 and are expected to continue to rise.

In America, prices have risen by about 18%, but the North American Olive Association says this may be because US markets are “largely insulated” from higher prices in Europe due to reduced demand. Yet consumers have seen a 750ml bottle of EVOO jump from about $9 to $11 in just one year.

More like this

The main reason for these price increases is a decline in global production. Just under 2 million tonnes are expected to be produced this year, 23% less than the average of the past four years, according to industry publication Olive Oil Times. In Spain, the world’s largest producer of olive oil, only 664,000 tonnes were produced last year, the second year in a row of low production.

This dramatic decline is firmly attributed to extreme weather events across Europe, such as warmer winters and heat waves due to climate change. If olive trees bloom too early in the year, they can be damaged by sudden frosts, while spring heat waves can also kill young blossoms. Years of drought, forest fires and diseases, including Xylella fastidiosa – a bacterium that destroys olive trees – have also taken their toll.

The impact of these shrinking harvests and rising prices on olive oil producers depends mainly on their size. Larger producers may have reserves they can use to maintain supply (although some industry insiders say these are also running low), or they can import olive oil from other countries, such as Argentina or Chile.

But smaller producers have seen demand for their olive oil decline as costs rise and consumers look elsewhere for cheaper alternatives. Some Spanish farmers have even accused supermarkets of jacking up prices, boosting profits at the expense of shoppers while they struggle.

What does this mean for consumers?

In short: you pay a lot more for olive oil until prices return to normal. British olive oil lovers are also dealing with the double whammy of rising prices and the impact of Brexit. A year after Britain left the European Union, olive oil prices rose by an average of 20%, and economists say post-Brexit border tariffs mean we will have to pay an extra £2 billion for goods brought into the EU, including olives. oil.

Consumers should also be on the lookout for counterfeit olive oil as skyrocketing prices have led to a surge in liquid gold on the black market. Criminal gangs have now started selling lower quality olive oil mixed with various vegetable oils, such as sunflower or rapeseed oil, colorants and other ingredients, and then labeled as EVOO.

In November 2023, Spanish and Italian police seized more than 260,000 liters of fake EVOO. This was found to contain ‘lampante oil’ – literally lamp oil in Italian – a very low quality olive oil not considered suitable for human consumption. Other gangs have stolen olive oil en masse, leading to the unusual sight of bottles fitted with security tags or larger bottles chained together and padlocked to the shelves.

Will olive oil prices drop?

Things are looking good for farmers, which means prices for consumers should drop. In September 2024, The grocer reported that more favorable weather means a ‘big harvest’ across the Mediterranean this summer. Spanish olive oil production is expected to reach 1.4 million tons, returning it to normal, while global production is expected to reach 3.13 million tons.

However, this new olive oil won’t hit our shelves until (at least) January 2025, so prices will remain above average until then. And the British government is unlikely to follow the Spanish example and cut sales tax on olive oil to lure shoppers. But there are many more oils you can use in the meantime.

It is also unlikely that prices for American customers will drop significantly: in 2023, America imported more than $2 billion worth of olive oil. The US is responsible for 35% of all global olive oil imports, so US shoppers are still subject to the forces of the European market. But there are many more oils you can use to keep costs down.

What to do if you can’t afford olive oil

Olive oil may be a kitchen cupboard staple, but it’s not the only cooking oil available. Canola oil and sunflower oil are ideal for frying, grilling and sautéing, while peanut oil is excellent for stir-fries, and sesame oil is best added as a finishing touch to salads, noodles and stir-fries due to its delicate flavor.

To further increase olive oil supplies, you can now buy it mixed with other vegetable oils. For example, you may see sunflower or vegetable oil mixed with a low percentage of olive oil. These oils generally have a wide range of uses, but the taste can vary depending on the proportions used, so try a few to find one you like.

When it comes to cost, regular vegetable oil may be the cheapest. This contains a blend of vegetable oils, including canola, grapeseed, soy and corn, but it may not be the healthiest option. ‘Specialty’ oils such as walnut, almond and avocado oil often come with a hefty price tag, so save these for delicate dishes rather than fried potatoes.

Buying in bulk (5 liter bottles) is much cheaper per use, but check whether you have enough space to store this amount of oil. Also keep an eye on the expiration dates: cooking oil can become rancid once opened and not used for a long time. Why not team up with a friend to split the cost and volume of the oil you buy?

What is the future of olive oil?

Although the olive harvest for 2024/2025 has increased, the future of olive oil is far from stable. Experts agree that climate change is making it harder for olive trees to survive in warmer, drier conditions, while research shows that the number of ‘bad years’ will become more common in the future.

Farmers are trying a number of ways to adapt to tougher conditions, such as growing more resilient olive crops or bringing back old traditions, such as planting different crops between trees to prevent water from running off. Unfortunately, this does not guarantee that olive oil production will fully recover or address climate change, the root cause of the problems.

But you can do your part. Find out how you can reduce your carbon footprint and incorporate more sustainable foods into your diet. And keep an eye on the price of liquid gold: if it ever surpasses real gold, the cost to the planet could be much greater.

More like this

How do extreme heat waves affect our diet?

The facts about ‘forever chemicals’ in our food

What is chlorinated chicken?

What would happen if everyone went vegan?

The Planet-Friendlier series from Good Food

Rosalind Ryan is a journalist and editor specializing in health, lifestyle and environmental issues. She has almost twenty years of experience writing for publications such as The Guardian, The Independent, Healthy magazine and Women’s Health.