Why did olive oil become more expensive worldwide? These are the reasons

Lately, there’s something different about the olive oil that Michelle Spangler buys, bottles, and infuses with flavors for her shop, Infused Oils & Vinegars, in Dallas, Texas. It’s not the taste, but the cost: Global olive oil prices have soared to record levels, more than doubling in the past year.

Spangler has an agreement with a supplier that protects her against such rapid price increases, but she still expects to pay up to 20 percent more. It plans to increase its prices by 10 to 15 percent early next year.

“It’s not a cheap product, and that will probably cause some of my customers to abandon that product line,” he said.

Olive oil is a globally traded commodity, and events in one part of the world impact faraway places. Drought in Spain, the world’s largest olive oil producer, has devastated recent harvests, and bad weather has affected olive crops in other major producers such as Italy, Greece and Portugal. The result is that prices rise to dizzying heights, well above $9,000 per metric ton.

That means more expensive bottles. In the United States, which imports most of the oil it consumes, a 750-milliliter bottle of Bertolli extra virgin olive oil that cost around $9 in October 2022 cost around $11 this October, reports IRI, a supplier. of data.

Southern Europe accounts for more than half of the world’s olive oil production. The harvest began there last month and the European Commission said production in Spain, Italy and other countries would recover only slightly from last season’s 40 percent drop, limiting supplies and raising prices.

Olive oil has become so expensive that it has attracted criminal gangs, with some particularly brazen thefts from farms and factories in Spain and Greece.

Shawn Addison is the owner of Olive Oil Source, a wholesaler in California. In July, his largest supplier, which sources its oil from Australia and California, informed him that the wholesale price of olive oil would rise more than 30 percent.

Some companies like Addison’s are looking to the southern hemisphere, but the impact of the shortage in the Mediterranean can be difficult to avoid, since the dispute over the scarce supply makes it difficult to obtain a good price for Chilean or Argentine olive oil.

Leah Bradley, chief financial officer of Veronica Foods, an olive oil supplier in California, said South America and Australia had good crops last year, which mitigated some of the damage in Spain.

Since olive oil is produced in so many parts of the world, the fear among sellers is not so much scarcity, but rather how much more consumers are willing to pay.

Gray Brooks, owner of Pizzeria Toro in Durham, North Carolina, said olive oil was crucial to the flavor and texture of his pizza dough.

Last month, it raised prices 5 to 10 percent, with about half of the increase due to the cost of olive oil, which it sources from Italy. He won’t change his recipe, but he said rising food costs had made his job more difficult.

“Many people like me are feeling the weight of this,” he said.

By: SANTUL NERKAR