Olive oil is the latest commodity to see huge price hikes as it faces extreme weather during its production.
The average price in August was 130% higher compared to the year before. Global prices for olive oil were at $8,900 per ton in September driven by extremely dry weather in the Mediterranean, according to a report by the United States Department of Agriculture.
Spain is the world’s largest exporter of olive oil and has suffered from intense drought for months.
Olive oil production in Spain has dropped to 610,000 tons, a 50 percent decrease in production when compared to its usual 1.3 million to 1.5 million tons produced.
“Adding to the complexity of the situation are concerns about reduced production in other major European olive oil-producing countries, including Italy and Greece, where drought conditions prevail,” Mintec’s oilseeds and vegetable oils analyst, Kyle Holland, told CNBC.
Prices for olive oil rose to $9.02 per kilogram in September in Spain’s Andalusia, marking the highest price recorded for Spanish olive oil.
In addition to dealing with poor weather, some olive oil distributors have been plagued with theft.
A family business had about 50,000 liters of extra olive oil stolen from one of Spain’s oil mills. That’s equal to about $450,000 lost.
Thieves also made off with 6,000 liters of extra virgin olive oil from the Terraverne oil mill.
It is expected that olive oil stocks could be depleted before October, when the fresh harvest is expected to be ready.
Turkey has suspended its olive oil exports until November 1, a decision related to the global surge in prices. The suspension has already hurt Spain’s reserves, according to Holland.
“The suspension has worsened the already limited volumes in Spain,” Holland warned.
