Consumers have felt the squeeze at the pump as olive oil prices continued to climb for months. The rise, which started to be noticed last October, is expected to persist until September, driven by a drop in production following last year’s drought. A liter of olive oil sits around 9 euros, and the consumer price index has spiked as well, highlighting the broad impact on household budgets in both Spain and importing markets in Canada and the United States.
Forecast for a hike in olive oil
The agriculture department reported that olive oil production for the 2022/2023 campaign ended at 675,093 tonnes, a drop of 54.7% from the prior season. Early forecasts for the coming months remain bleak, with experts anticipating that next season’s output will stay well below normal. This creates a supply-side constraint that sustains higher prices across markets in North America and Europe.
José Luis Ávila, secretary general of COAG Jaén and head of the oil sector coordination, notes that scarce water, high temperatures, and a marked shortage of available product will keep olive oil prices elevated for an extended period. In regions heavily reliant on olive oil imports, such as parts of Canada and the United States, these dynamics translate into continued price volatility and tighter margins for retailers and foodservice operators.
Increase in olive oil price
The agriculture department monitors and compiles national price movements across the oil campaign. In the first week of August, bulk extra virgin olive oil arrived at about 753 euros per 100 kilograms, reflecting a 112% year-on-year increase. For the higher-quality extra virgin category, prices stood around 696 euros per 100 kilograms, an 89% rise from the previous year. These figures underscore how producers, distributors, and consumers in North American markets are feeling the impact of tighter supply chains and stronger demand.
Despite elevated prices, farmers report that earnings remain modest because available volumes are still insufficient to ensure substantial profits. The outlook for the next campaign, shaped by ongoing drought and heat, remains negative. While Spain remains the world’s leading olive oil producer, projections suggest that even if the two biggest commodities align in production, Spain’s total yield will come in around 1.4 million tonnes. This scenario implies continued price pressure for international buyers, including Canadian importers and U.S. retailers seeking steady supply and predictable costs.