Due to the drought in Spain, the price of olive oil has risen to a record level

According to the IMF, world olive oil prices rose to a 26-year high of $5,989.8/t amid a prolonged drought in Spain, the largest producer and exporter of the product.

Mintec experts said that due to unfavorable weather, Spain harvested 50% less olives than usual from October 2022 to February 2023, as a result of which olive oil production decreased from the usual 1.4-1.5 million tons to 630 thousand tons.

The Spanish Ministry of Ecology reports that the amount of precipitation in March amounted to only 36% of the average monthly norm, and in general, the deficit of precipitation in the country has been observed for 36 consecutive months.

The drought in Europe, and especially in Spain, has led to a global shortage of olive oil, the demand for which has grown significantly in recent years, the Olive Oil Association of Australia notes. - Its prices began to rise in 2020, because during the covid-19 pandemic, people began to cook more often at home. Due to the shortage of sunflower oil caused by the war in Ukraine, the demand for olive oil increased even more, but it has now started to decrease as consumers have become more economical with olive oil or switched to other types of vegetable oils.

However, the basic demand for useful and natural olive oil will remain at any price, experts believe. If rainfall does not increase, prices will remain at or exceed a record €5/kg until the 2023/24 MR harvest.

An increase in the price of olive oil may lead to an increase in the price of high-oleic sunflower oil, which has similar quality characteristics. The main value of high-oleic oil is the high content of oleic acid (up to 90%), while olive oil contains an average of 71% oleic acid and is 3-4 times more expensive.