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Global olive oil shortage sends prices soaring

Featured Global olive oil shortage sends prices soaring

Olive oil stocks are almost depleted in Europe, which is bracing for new shortages due to extreme weather events that have adversely affected harvests for the second consecutive year.

The shortages, which have sent prices skyrocketing internationally, are so severe that European countries have begun importing quantities of olive oil from Chile and other Latin American countries, the Guardian reports.

Olive trees have been cultivated for thousands of years in the Mediterranean, with Spain producing almost half of the world's olive oil. However, drought, wildfires and heatwaves in the summer severely affected production in many states.

According to the International Olive Oil Council, global production is expected to fall to 2.4 million tonnes less than last year – when global demand hovers around three million tonnes.

Olive producers in Spain face disaster

In Spain, olive oil production is expected to reach 750,000 tonnes this year - more than last year's 660,000 - but almost half of last years' average of 1.3 million tonnes, with some supermarkets putting anti-theft packages of olive oil as prices soar.

Because of the drought, some olive oil producers are facing a disaster, says the local head of Asaja, Spain's largest agricultural union, Rafa Guzman, who grows olive trees in the Jaen region, the cradle of olive oil production in the Iberian country. “Production here has dropped by 70% to 80%. There are producers who did not manage to produce even one kilo of olives. And even though olive oil sells for €8 a bottle, it's not enough to make ends meet," he told the British newspaper.

In Spain, available olive oil stocks are at 115,000 metric tons, according to analysts at commodity data group Mintec, against monthly usage of about 60,000 tons. "If this rate of depletion continues, experts have warned that olive oil stocks could run out before the arrival of the new harvest, which traditionally starts in Spain around October," said Kyle Holland, edible oil analyst at Mintec.

Reduced harvest in Greece, Italy, Turkey

The crisis was exacerbated by extreme weather conditions in other major oil producing countries, such as Greece, Italy, Portugal, Turkey and Morocco.

The production in our country of the internationally famous Greek olive oil is expected to reach 200,000 tons this year, reduced by a third compared to last year due to the heat and the Mediterranean fly. As noted by Manolis Gianoulis, president of the National Interprofessional Olive Oil Organization, the price increases are "over 100%".

“We're seeing production rates cut in half this year. The imbalance between demand and supply has already led to very large price increases, which while they benefit producers, they hurt consumers a lot,” he says.

But also in Italy, the high summer temperatures, the drought, and recent hailstorms in the Apulia region dashed hopes for the production of 350,000 tons of olive oil this year. Production was also affected by Xylella (Xylella fastidiosa), a phytopathogenic bacterium, which has destroyed six million olive trees in recent years in the country.

Turkey, Tunisia and Syria recently halted olive oil exports in an attempt to limit the rise in its price on the domestic markets.