Due to supply shortages caused by climate change, olive oil now costs a record $9,000 a tonne, the Washington Post reported on Friday. That’s up 12.5 per cent this year, on top of an 8.8 per cent increase last year, according to Chicago-based market research firm Circana.
In Spain, the world’s top olive oil producer, production in May was down 48 per cent from a year earlier. And while the new harvest usually begins around October, industry insiders are concerned that this year’s growth won’t be much help: The drought and water shortages of recent months in Spain aren’t ideal conditions.
The same is true of other countries famous for their olive oil: Italy, the second largest producer of olive oil, has experienced drought in the important Apulia region. And crops in Portugal, Tunisia, Morocco and Greece have been similarly affected. Some countries, such as Turkey, have had good harvests, but the authorities there have banned bulk exports of olive oil to ensure that enough remains in the country.
These trends have prompted the US Department of Agriculture to downgrade its outlook for olive oil. Last month, the agency estimated that only 2.5 million tonnes of olive oil would be produced globally this year. That’s a quarter less than last year’s production and the five-year average, the Post notes. What’s more, the USDA said that prices had risen 130 per cent since last year and that the effects of climate change did not offer much hope for the future of olive oil.
The United States is a major importer of the ingredient, taking in about 30 per cent of the world’s supply, according to USDA data cited by the Washington Post. That figure is expected to rise to 35 per cent this year and even higher the following year. And while there are American olive oil producers, they don’t produce nearly enough to meet demand.
“The U.S. is a consistent net importer of olive oil – its domestic olive oil production, which averages about 16,000 tonnes per year, is not enough to meet consumption, which is about 390,000 tonnes,” Vito Martielli, a senior grains and oilseeds analyst at Rabobank, told the Post.
We’re an olive oil-loving nation, but it’s not clear how long our high consumption rate can continue.
