The wholesale price of Spanish extra virgin olive oil hit a fresh all-time high on Tuesday, above €8,200 ($8,880) per metric ton ($8,900), according to Bloomberg.
This came as Spain, which produces around 45% of the world’s olive oil, braces for its second devastating harvest in a row.
In the 2022/23 season, Spain produced around 662,000 tons of olive oil, according to Spain’s Agriculture Ministry. That’s a 54% decline from the four-year production average.
And farmers say much of the damage has already been done to the 2023/24 crop. Andalusia, where most of Spain’s olive oil comes from, is still crippled by an ongoing drought.
“The drought plus the high temperatures that we saw when the olive trees were in flower in almost all olive-growing areas in the country … means we’re headed to another bad harvest, and that is going to cause even more tension in the markets,” Cristobal Cano, the president of the farmers’ union APA, told Spanish daily Europa Press.
“In the best-case scenario, our production will be the same as last season,” he added.
The dramatic situation has turned into an oil shock for Spanish consumers, with retail prices having skyrocketed in little over a year. A standard liter that used to cost around €5 is now hovering around €10.
In a country where food depends heavily on high-quality olive oil, in the first half of the year, olive oil consumption in Spain plummeted by 51%, according to data from the University of Jaen.
Spain’s government officials say that the effects of heat and drought show the importance of addressing climate change and switching to more sustainable practices.
Last year was the hottest year on record in Spain. This year also saw extreme heat, with the spring of 2023 coming in as the hottest and driest on record and July as the fourth hottest month in Andalucia.
