`World Olive Oil Shortage Leads to Higher Prices - Olive Oil Times
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World Olive Oil Shortage Leads to Higher Prices

By Isabel Putinja
Aug. 5, 2015 09:09 UTC
Summary Summary

The global olive oil short­age caused by poor har­vests in Spain and Italy has led to a sig­nif­i­cant increase in prices, sur­pass­ing the global infla­tion rate for pack­aged foods. Despite increased yields in Greece and Tunisia, the short­ages in Italy and Spain have resulted in a 10 per­cent price increase for olive oil, with con­sumer prices now at their high­est lev­els in years.

World olive oil prices have soared as the effects of last year’s dis­as­trous olive har­vest in Europe are being felt at the con­sumer level.

Several recent arti­cles in the inter­na­tional media have reported on the world olive oil short­age and sub­se­quent rise in prices due to the poor har­vests of the 2014 – 2015 sea­son in Spain and Italy, the two coun­tries respon­si­ble for 70 per­cent of the global olive oil out­put.

Spain suf­fered from extreme heat and drought in the sum­mer of 2014, while Italy was hit with fruit fly infes­ta­tions and the deadly Xylella fas­tidiosa bac­terium which has dec­i­mated olive groves in Puglia.

Greece and Tunisia, how­ever, have expe­ri­enced increased yields, 127 per­cent and 300 per­cent respec­tively, com­pared to 2013/2014 lev­els. Tunisian olive oil exports have reached a record high, increas­ing seven-fold com­pared to the pre­vi­ous year, with most exports going, not sur­pris­ingly, to Italy and Spain. But the increased yields in Greece and Tunisia were not enough to com­pen­sate for the short­ages in Italy and Spain.

Bloomberg reported last week that fig­ures from Euromonitor indi­cate that con­sumer prices for olive oil have increased by 10 per­cent and have now sur­passed the global infla­tion rate for pack­aged foods by 3.7 per­cent. Reports by Oil World also revealed that the price of Spanish extra vir­gin olive oil is now at its high­est since April 2006, at $4,272 a ton.

Meanwhile, cit­ing fig­ures from the British trade jour­nal The Grocer, which cov­ers the UK’s FMCG (fast-mov­ing con­sumer goods) sec­tor, The Guardian reported that the aver­age price of a liter of extra vir­gin olive oil rose from £6.32 ($9.84) in December 2014 to £6.95 ($10.82) in July 2015. The same arti­cle revealed that demand for olive oil by retail­ers and dis­trib­u­tors in June 2015 was 12 per­cent higher than what exporters could deliver.

International Olive Council (IOC) fig­ures put the total world out­put this year at 2.3 mil­lion tons, a fall of one-third from last year’s pro­duc­tion and the low­est level since 2000.

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