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THE RISE IN THE PRICE OF OLIVE OIL
- Why is the price of olive oil rising?
- What factors influence this increase?
- How does the drought affect the price of oil?
"The price of olive oil is going up again", "new rise in the price of oil", "olive oil is getting more expensive every day"; surely you have been hearing these statements during the last months in every informative redoubt you go to, oil is getting more expensive, an objectively true fact, but, do you know why the price of olive oil is going up? Today, in the blog of Aceites La Muralla, we tell you all the keys to help you understand these changes in the price of olive oil.
THE UNION OF THREE FACTORS
It seems that all factors have come together to raise the price of our "liquid gold", but we could group them mainly into three: the consequences of the war in Ukraine, the devastating effects of the climate in recent months and the increase in the cost of production systems. A mix that did not bode well from the outset.
THE EFFECTS OF THE WAR IN UKRAINE ON THE RISE IN DEMAND FOR OLIVE OIL
During the beginning of the war in Ukraine, tons of sunflower oil were trapped for months before being delivered to their distribution points in Europe, which caused a shift in the consumption of vegetable fats towards oil from other fruits and seeds such as rapeseed, linseed, coconut and, of course, olives.
This unusual peak in international demand for olive oil was coupled with the low production of olive oil in other countries, which led to the first rise in olive oil prices in our economy. But this was only the beginning.
RISING PRODUCTION COSTS
The price of fuels shot up, also as a partial consequence of the war conflict; this meant that producing, both for farmers and for oil mills and packers, this product had totally unexpected cost overruns. The agricultural machinery needed fuels at unaffordable prices. The electricity bill of oil mills and packers doubled or even tripled in a matter of weeks; each stage of the production process became more and more expensive. Fertilizers and agrochemicals dumped their rise on our fields. The prices of packaging and distribution, of course, also suffered an increase in their prices.
AN EXCEPTIONALLY LOW SEASON
And then it was time for the harvest, the key moment that could mean a respite for this rise in the price of oil; or at least it would be if it were not for the fact that it will play the opposite role on this price board. This year the field has suffered as it has not done for a decade: drought, poor flowering, repeated heat waves that seemed to whip without mercy to the field and restrictions in irrigation systems, have resulted in an olive campaign with a reduction of up to 40% of the usual production. According to the forecasts of farmers and the Ministry, an estimated harvest of between 750,000 and 800,000 tons is expected this season. This figure is far from the annual average of 1.4 million tons.
THE MOST COMPLICATED PART OF THE EQUATION
With these data on the table, what is the most urgent concern to solve these months? As you may be guessing, it is the supply of the 575,000 tons that the Spanish consume on average and with an international market that demands 1 million tons on average in exports, this seems complicated to solve.
Now we can only look to the sky and hope that this drought, which has been hitting our fields for the last three years, will give us a break. We hope that society becomes aware that our actions count and that we must not only be responsible with our consumption patterns but also ask, as a social group, for solutions to the effects that we are already seeing in the countryside on the climate and, of course, that measures are taken to alleviate the consequences of these effects.
We, for our part, are committed to continue generating EVOOs of exceptional quality with what nature can provide. We pledge to give our best even when the outlook appears to be as uncertain as it is now.
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