Olive oil is brutally expensive

By: Trademagazin Date: 2024. 01. 16. 12:16

The Spanish olive oil industry is in deep crisis, and producers describe the situation as dramatic. In the last three years, the price of Spanish olive oil has increased by more than 165%, mainly due to dry weather and drought. By December 2023, the price of Spanish olive oil had increased by 54.6% compared to the previous year, bringing the cumulative price increase to 165.5% over three years.

Drought has halted harvesting and only 765,300 tonnes are expected to be harvested in the 2023/2024 season, a 15% improvement on the previous year but still 34% below the four-year average. Olive oil stocks are also declining, starting the season 43% lower than last year and 52% below average.

The Spanish government has taken urgent measures to deal with the crisis, temporarily reducing the VAT on olive oil to 5% and promising to remove it completely in the coming months. The direct cause of the price increase is the decrease in supply, but inflation and world market dynamics also play a role in this.