Extra virgin olive oil is becoming more and more expensive – these are the reasons

Latest figures indicate that after the 2021-2022 harvest, a total of 3.27 million tons of olive oil were produced worldwide. However, this plummeted to 2.89 million tons in the 2022-2023 season. This discrepancy is due to the fact that olive harvesting and processing in the northern hemisphere occur from October to February, with immediate pressing required for high-quality oil. Southern hemisphere production (May to August) is also important, albeit in smaller quantities.

Spain stands as the largest producer, with over 40% of the global market share. Yet, Turkey, Italy, Greece, Tunisia, and Morocco also play pivotal roles. The Southern European drought and warm weather have significantly impacted yields. In Spain, the leading producer, scarce rainfall led to the withering of a substantial portion of olives during flowering.

Given this scenario, this year’s harvest could be even worse, potentially dropping by a quarter compared to the norm. Alongside increased production costs, declining customer demand poses a challenge to the industry. The global olive oil market represents an annual value of $10-15 billion. Prices have more than doubled in a year, escalating from $4,000 to $8,500. Apart from quality, labeling, bottling, transportation, and marketing also influence prices.

The role of the European Union is pivotal in the olive oil market. The EU is a key producer, consumer, and exporter of olive oil. However, imports are also crucial, especially from China and other regions. Olive oil comes in various categories due to its numerous uses, and its health benefits drive growing demand.

In conclusion, the market is highly dynamic and volatile, impacting prices and production. Global demand for olive oil is on the rise, yet production challenges and natural conditions significantly affect the market.