‘Liquid gold’: An olive oil shortage is fueling record prices and food insecurity fears

A
shortage
of
olive
oil,
sometimes
referred
to
as “liquid
gold,”
has
driven
prices
to
record
highs,
fueled
a
crime
surge
and
pushed
the
industry
into
crisis
mode.

The
skyrocketing
price
of
the
liquid
fat,
a
superfood
staple
of
the
Mediterranean
diet,
has
stunned

consumers
and
industry
veterans
alike
in
recent
months.

Kyle
Holland,
an
analyst
at
market
research
group
Mintec,
said

climate-fueled
extreme
weather
had “significantly
impacted”
olive
oil
production
in
southern
Europe
in
recent
years,
particularly
in
Mediterranean
countries
such
as
Spain,
Italy
and
Greece.

Spain,
which
supplies

more
than
40%
of
the
world’s
production
according
to
the
Centre
for
the
Promotion
of
Imports,
might
typically
be
expected
to
produce
somewhere
between
1.3
million
to
1.5
million
metric
tons
of
olive
oil
each
harvest,
Holland
said.

However,
official
figures
showed
Spain
only
cultivated
around
666,000
metric
tons
for
the
2022/2023
campaign.
Market
players
surveyed
by
Mintec
expect
a
production
range
of
830,000
to
850,000
metric
tons
for
Spain’s
2023/2024
season,
an
increase
of
roughly
40,000
metric
tons
from
previous
estimates.

Extra
virgin
olive
oil
prices
in
Spain’s
Andalusia
stood
at
7.8
euros
($8.4)
per
kilogram
as
of
April
19,
according
to

Mintec’s
benchmark
index,
down
from
just
over
8
euros
at
the
end
of
March.
The
decline
extends
a
downward
trend,
after
olive
oil
prices
reached
an
unprecedented
peak
of
9.2
euros
in
January.

A
dizzying
rally
for
olive
oil
has
cooled
in
recent
weeks,
in
part
due
to
beneficial
rains
in
March
and
April
and
to
an
uptick
in
production
estimates
for
Spain’s
olive
harvest.
But
analysts
said
that
dwindling
olive
oil
reserves
would
likely
keep
markets
on
edge
for
sudden
price
spikes
over
the
coming
months.

“I
think
the
biggest
concern
is
effectively
the
overall
supply.
People
are
quite
bearish
on
the
market
right
now,
but
as
the
season
wears
on,
and
as
we
get
further
and
further
away
from
the
harvest
we’ve
just
had,
most
market
players
seem
to
think
that
it
is
going
to
drain,”
Holland
told
CNBC
by
telephone.

“The
question
on
people’s
lips
is
yes,
prices
seem
to
be
going
down
right
now,
but
eventually
people
are
going
to
need
to
start
buying.
And
when
you’re
buying
against
diminished
volumes,
they
are
saying
that
if
volumes
drain
and
everyone
needs
to
buy,
then
prices
have
to
go
up.”

“This
is
not
normal,”
Vito
Martielli,
senior
analyst
of
grains
and
oilseeds
at
Netherlands-based
Rabobank,
told
CNBC
by
telephone.

Martielli
said
the
recent
price
volatility
was
like
nothing
he’d
ever
seen
in
his
more
than
20
years
of
studying
the
olive
oil
sector.

“To
have
a
clear
view,
I
think
we
need
to
wait
a
couple
of
months
until
the
end
of
June,
but
rain
in
the
month
of
the
March
was
a
positive
signal
for
improving
production,”
he
added.

Helena
Bennett,
head
of
climate
policy
at
independent
think
tank
Green
Alliance
UK,
unequivocally
attributed
the
record
spike
in
olive
oil
prices
to
climate
change.

“The
world’s
biggest
exporter
of
olive
oil,
Spain,
has
halved
its
production
due
to
drought
and
extreme
heat,
increasing
its
price
(at
origin!)
112%
since
2022,”
Bennett

said
on
social
media
platform
X
on
April
10.

“It’s
happening
to
other
food
crops
too.
Olive
oil
today,
everything
else
soon.”

In
a
first
of
its
kind
regional
analysis
of
climate-related
risks,
the
European
Environment
Agency

said
in
March
that
European
countries
should
prepare
for “catastrophic”
consequences,
as
the
deepening
climate
crisis
hits
every
part
of
their
economies
this
century.

The
EEA’s
report
said
climate
impacts
on
food
production
could
hit
the
region
hard,
particularly
in
southern
Europe,
as
extreme
heat
becomes
more
frequent
and
precipitation
patterns
change.

Asked
how
vulnerable
olive
trees
were
to
climate
change,
Mintec’s
Holland
replied: “The
word
I
would
use
is ‘exceedingly.'”

Holland
said, “I
think
one
thing
I
would
say
is
that
players
we
speak
to
are
extremely
concerned,
because
the
climate
generally
is
getting
warmer.
And
a
lot
of
these
issues
are
exacerbated,
of
course,
with
more
heat,
less
rain,
drier
soils,
less
moisture
and

olive
oil
flies
are
also
one
of
these
issues
that
people
speculate
is
only
going
to
get
worse.”

He
added, “Some
players
we
speak
to
that
have
been
doing
this
for
many
years
wonder
how
they
are
going
to
carry
on
because
if
you
are
losing
40%,
50%,
60%
of
your
crop
and
you
still
have
all
the
input
costs
and
the
fertilizer
costs,
the
tending,
weeding,
the
watering
if
you
can
…
then
the
issue
is
quite
critical.”

Rising
olive
oil
prices
have
also
coincided
with
a
spate
of
thefts.

Supermarkets
in
Spain
said
in
early
March
that
olive
oil
had
become
the
most
stolen
item
across
large
swaths
of
the
country,
according
to

The
Financial
Times.
The
main
culprits
were
said
to
be
criminal
gangs
targeting
the
essential
food
item
for
resale
on
the
black
market.

In
August
last
year,
approximately
50,000
liters
of
extra
virgin
olive
oil
was
stolen
from
one
of
Spain’s
oil
mills
in
the
Cordoba
region,
according
to

local
media
reports.

The
stolen
olive
oil
was
estimated
to
have
been
worth
more
than

420,000
euros
at
the
time.

—
CNBC’s
Lee
Ying
Shan
contributed
to
this
report.