The olive oil market faces a perfect storm that is reshaping the scene for consumers and producers alike. Extra virgin olive oil, once considered a benchmark of quality, is now caught between surging costs and changing weather. A recent weekly bulletin from national agricultural authorities notes that prices for olive oil have jumped by about 56 percent from last year, driven by drought, an energy crunch, and the ripple effects of international conflict. Strong summer heat pushed production down, with a drop of around 50 percent observed in this season’s harvest. Yet, supply lines remain robust enough to avert a complete shortage, even as merchant margins and consumer prices come under pressure.
Harvests in the field have not fully materialized, and expectations for this year remain cautious. Water stress and dry spells have trimmed output, with forecasters predicting a total of roughly 780,000 metric tons of oil, which would be about half of last year’s production. To put that in perspective, last year’s harvest stood near 1.45 million tons. The timing and yield of the collection have also been impacted by recent rainfall, adding another layer of variability to the seasonal outlook.
Increase in other markets
All of these factors are translating into higher prices for extra virgin olive oil. The current market rate hovers around five euros per liter, marking a noticeable rise over the previous month. Across Europe, other major producers report similar strains. In Italy and Greece, harvests have contracted and prices have risen, according to the latest European Commission updates. The Commission notes a multi-country pressure point, with prices climbing by roughly 31% in Italy and 27% in Greece. Spain, however, holds a dominant position in the market, accounting for a substantial share of production and export activity.
Spain alone exports a sizable portion of its output, reinforcing its pivotal role in European supply chains. The scarcity story is compounded by agricultural shifts compelled by global events, including lower sunflowers yields due to ongoing conflicts. With sunflower crops constrained, some sectors have pivoted toward olive oil as an alternative source, influencing both demand patterns and price dynamics across the continent.
Experts emphasize that while supply pressures persist, the olive oil market remains resilient in some regions due to diversified producers and ongoing protective measures. Nevertheless, consumers should anticipate continued price volatility in the near term, with regional variations likely based on weather, harvest timing, and policy responses. Market watchers continue to monitor weather patterns, harvest forecasts, and subsidy programs that could cushion price swings while maintaining steady access to premium olive oil products. [Source: European Commission reports; national agricultural bulletins]