“Liquid Gold”: An Olive Oil Shortage

An olive oil shortage drives record prices and fears of food insecurity

An olive oil shortage has driven prices to record highs, fueled a crime wave, and sent the industry into crisis mode. The explosive rise in the price of the liquid fat, a staple of the Mediterranean diet, has surprised consumers and industry veterans alike in recent months.

Kyle Holland, an analyst at market research group Mintec, said that extreme weather fueled by climate change has significantly impacted olive oil production in Southern Europe in recent years, particularly in Mediterranean countries such as Spain, Italy, and Greece.

Spain, which supplies more than 40% of global production, according to the Center for Import Promotion, could produce between 1.3 million and 1.5 million metric tons of olive oil in a typical harvest. However, official figures showed that Spain cultivated only around 666,000 metric tons for the 2022/2023 campaign.

A dizzying upswing for olive oil has cooled in recent weeks, partly due to favorable rains in March and April and an increase in production forecasts for the Spanish olive harvest. But analysts said dwindling olive oil reserves were likely to continue to keep markets on their toes, with sudden price jumps likely in the coming months.

“This is not normal,” said Vito Martielli, senior grains and oilseeds analyst at Netherlands-based Rabobank. Martielli said the recent price volatility was like nothing he had seen in his more than 20 years studying the olive oil sector. Helena Bennett, head of climate policy at the independent think tank Green Alliance UK, clearly attributed the record-breaking rise in olive oil prices to climate change.

The European Environment Agency said in a first-of-its-kind regional analysis report on climate-related risks in March that European countries should prepare for “catastrophic” consequences as the deepening climate crisis affects every part of their economies this century.