Why Extra Virgin Olive Oil Is More Expensive This Year
Why Extra Virgin Olive Oil Is More Expensive This Year
In 2024, the price of extra virgin olive oil increased significantly. Several factors are behind this increase.
Climatic and Meteorological Conditions
The main cause of the price increase is linked to adverse weather conditions in the Mediterranean region, which produces the majority of the world's olive oil. Severe droughts and heat waves in Spain, Italy, Greece, and Portugal have seriously affected olive harvests. In Spain, the world's largest olive oil producer, production has fallen by more than 60% due to these conditions. Similar problems have affected Greece and Portugal, while Italy, although slightly better off, faces considerable challenges.
Market Dynamics
The decrease in the overall supply of olive oil has led to a natural increase in prices. For example, extra virgin olive oil prices have more than doubled in key markets such as Jaén, Spain, and Bari, Italy. This increase is also due to increased demand in regions where olive oil is a staple food, as well as a reduction in alternative vegetable oils such as sunflower oil.
Economic and Political Factors
Global economic and political factors also influence this price increase. Export restrictions and changes in local consumption habits contribute to the price increase. For example, Turkey has banned bulk exports of olive oil to ensure domestic supply, which affects availability and global prices. Furthermore, rising production costs due to rising prices for fertilizers and other inputs have exacerbated the problem.
Impact of Packaging Costs
Another factor contributing to the rise in extra virgin olive oil prices is the rising cost of packaging materials, particularly glass bottles. These are preferred for their ability to protect olive oil from oxidation and light, thus preserving its quality. However, the cost of glass has increased due to supply chain disruptions and the rising energy costs required for its production. This increase in packaging costs is reflected in the final price for consumers.
Impact on Consumers
Consumers around the world are feeling the effects of these price increases. In countries with high olive oil consumption, such as Spain, Italy, and Greece, people continue to buy olive oil despite price increases due to cultural preferences. However, in regions where olive oil is less essential, consumers may turn to other vegetable oils. In wealthier markets like the United States and Canada, demand remains relatively stable, as consumers are willing to pay higher prices.
In conclusion, a combination of adverse weather conditions, economic factors, geopolitical issues, and rising packaging costs has led to a significant increase in olive oil prices. This trend is expected to continue until production levels stabilize and market conditions improve.
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https://vancouver.citynews.ca/2024/05/22/canada-olive-oil-price-skyrocketing/
https://www.procurementresource.com/news-and-articles/olive-oil-prices