Drought in Spain: Olive oil prices go through the roof

Drought in Spain
Olive oil prices are going through the roof

By Jan Gänger (text) and Laura Stresing (graphics)

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Olive oil is becoming more and more expensive. A lack of rain is causing poor harvests in Spain and thus rising prices on the world market. Consumers have to prepare for the fact that they will have to pay even more in the future than before.

Inflation is weakening, but food is still becoming noticeably more expensive. At the forefront: olive oil. According to the Federal Statistical Office, in November it cost a whopping 43 percent more in Germany than a year ago. And there is no end in sight to the sharp price rise.

A look at the wholesale prices in Europe shows how rapid the price development is. At the beginning of 2021, Spanish oil of the inferior Lampante variety still cost 1.87 euros per liter. It is now 6.85 euros. The price for higher quality Spanish Virgen oil shot up from 2 euros to currently 7.10 euros. This year alone it has almost doubled.

Spanish olive oil is used as a reference because the country is the largest producer of olive oil. 70 percent of the oil consumed in the EU and 45 percent of the world’s oil is produced there. The heart of Spanish production is Jaén, a province in the interior of the country. There has been a drought there for many months, which is also affecting other olive-growing areas across the country. The harvests are much worse. Because of Spain’s role on the world market, the consequences are significant: if the supply of oil falls significantly, the price rises noticeably while demand remains the same.

The lack of rain is the most important, but not the only, reason why Spanish olive oil has become more expensive. Producers have higher costs – for example, the prices for energy and fertilizers have risen sharply.

Climate change means that the traditional experience that a bad crop year is often followed by a good one is losing its validity. “We actually have a Mediterranean climate, which tends to have dry periods, periods of heavy rain and periods in between,” the BBC quoted the head of a Spanish cooperative of olive oil producers as saying. “At the moment we have a dry period that is lasting a very long time.”

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