A severe drought in Spain has been blamed for the soaring costs.
Olive oil prices have surged to record levels due to a prolonged drought in Spain, the world’s largest producer and exporter of the product.
Prices have surged more than 60% since June, and experts warn that consumers will have to brace themselves for further increases. The severe drought that Spain has been experiencing since last summer is now threatening the global olive oil supply, causing prices to spike around the world.
Data from the International Monetary Fund (IMF) showed that global olive oil prices have hit $5,989.8 per metric ton, marking a 26-year high.
“We are living in an unprecedented situation,” Juan Vilar, a strategic consultant for the sector, told Olive Oil Times. “There have never been olive oil prices at origin like we are seeing now.”
The recent October-to-February olive harvest produced a yield 50% less than usual due to exceedingly poor weather conditions. According to Spain’s Ecology Ministry, the country has experienced 36 straight months of below-average rainfall.
“Spain produced an olive oil crop of around 630,000 metric tons, down from the usual 1.4 to 1.5 million metric tons harvest,” Kyle Holland, the oilseeds and vegetable oils analyst at Mintec, told CNBC.
Analysts warn that without an increase in rainfall in Spain olive oil prices could remain at their current elevated levels for some time to come.
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