The drought in Spain is causing a significant increase in the price of olive oil, which is having a global impact on the industry. As the world’s largest producer of olive oil, Spain’s lack of rain is greatly affecting both the quantity and price of the oil. The current drought is the result of two consecutive years of low rainfall, leading to poor harvests and a decrease in supply. This, combined with high demand, is driving up the price of olive oil.
In Spain, olive oil prices have risen by over 70% this year alone, following a sharp increase in 2022. A liter of extra virgin olive oil now costs around €9 ($9.88; £7.79) in low-budget supermarkets. Although there has been a slight decrease in the market price in recent weeks, it is still significantly higher than in previous years. The Nuestra Señora del Pilar cooperative, the largest olive oil factory in the world, harvested only 24 million kilos of olives in the 2022-23 season, one of the worst figures on record.
The increase in costs of fuel, electricity, and fertilizers, along with the lack of rainfall, are the main factors contributing to the rise in the price of olive oil. However, climate change is also playing a significant role. The Mediterranean region, where Spain is located, is experiencing a 20% faster increase in temperatures than the global average, according to a UN environment program report. This change in climate patterns is disrupting traditional assumptions about harvest seasons, making it less predictable whether there will be a good harvest following a poor one.
Several regions in Spain, including Andalusia, have implemented measures to reduce water usage due to the drought. However, farmers and industry experts are calling for national and local governments to invest in irrigation systems and other measures that can help alleviate the impact of the drought on olive oil production. The rise in the price of olive oil is not limited to Spain, as other European countries are also experiencing increases, although not as sharp. In some cases, consumers are crossing borders to purchase slightly cheaper oil. For example, Spaniards near the Portuguese border have been buying oil in Portugal, where prices have not risen as dramatically.
In addition to the economic impact, there are concerns about the potential health consequences of using lower-cost alternatives to olive oil, such as sunflower oil. Olive oil is a key component of the Mediterranean diet, which is known for its numerous health benefits, particularly in preventing cardiovascular illnesses. Medical experts are warning that substituting olive oil with cheaper alternatives may have negative health effects.
The global olive oil industry is closely monitoring the situation in Spain, as the country’s production and prices have a significant impact on the market. Furthermore, this drought serves as a reminder of the vulnerability of agricultural industries to climate change and the importance of implementing measures to mitigate its effects. As consumers, we should be prepared for higher prices and consider the potential long-term consequences of substituting premium products like extra virgin olive oil. Our health and the future of the olive oil industry are at stake.
