The Washington Post this morning reports that "extreme heat, wildfires and drought have decimated much of the world’s olive oil harvest yet again, driving prices to a record high of $9,000 per metric ton … retail olive oil prices in the United States have risen in recent years because of extreme weather in olive-oil-producing countries, growing 12.5 percent this year atop an 8.8 percent increase in 2022."
Spain, which supplies half the world's olive oil, is particularly feeling the effects of climate change: the country has reported "a drop in production of 48 percent compared to last year."
The situation isn't likely to improve anytime soon. The Post writes that "the drought and lack of water over the past months in Spain is creating concerns about the new season, according to a recent Rabobank agriculture report. And in recent weeks, storms have affected Apulia, the most important olive oil production region in Italy, damaging the upcoming harvest. Italy is the world’s No. 2 olive oil producer.
"The news is similar among other major producers in the Mediterranean, with drought having affected crops from Portugal, Tunisia, Morocco and Greece. Turkey, which had a good harvest, is compounding the worldwide shortage by banning bulk olive oil exports to ensure adequate domestic supplies."
The Post notes that the US olive oil industry simply cannot fill the void; US producers make about 16,000 tons of olive oil per year, but US olive oil consumption alone comes in at 390,000 tons.
And here's a statistic that underlines the problem: "Olive oil is currently more valuable than crude oil (crude oil right now is less than a tenth of the price of olive oil, sitting at about $670 per metric ton)."
- KC's View:
To be honest, I could get by without crude oil. If I have to get somewhere, I can walk or ride a bike. Getting by without olive oil would be far more problematic.
This is one of a number of stories that have popped up in recent weeks about how climate change is affecting the supply of basic products on which we count. There seems to be no question that producers are going to have to find ways to compensate for these climate shifts, and retailers may have to move away from their "all products all the time" approach - this may turn out to be a promise that cannot be kept.