Due to harsh weather conditions during production, olive oil is the most recent commodity to see significant price increases.
August had a 130% increase in average price over the previous year. A report from the U.S. Department of Agriculture says that in September, weather conditions in the Mediterranean were so dry that olive oil prices around the world were $8,900 per ton.
Spain is the biggest producer of olive oil in the world, but it has been very dry for months.
Spain’s olive oil output has decreased to 610,000 tons, a 50% decline from the 1.3 million to 1.5 million tons that are typically produced.
Kyle Holland, an expert for oilseeds and vegetable oils at Mintec, informed CNBC that “there are also worries about a drop in production in Italy and Greece, two of the biggest olive oil-producing nations in Europe, because of drought.”
Recently, the price of olive oil in Andalusia, Spain, went up to $9.02 per kilogram. This was the highest price ever paid for olive oil in Spain.
Some olive oil dealers have had to deal not only with bad weather but also with theft.
A family company had 50,000 liters of excess olive oil taken from one of Spain’s oil factories. That’s the same as losing about $450,000.
The Terraverne oil factory also had 6,000 liters of extra virgin olive oil stolen.
Stocks of olive oil could run out before October when the new crop is supposed to be ready.
Turkey has stopped sending olive oil abroad until November 1. This is because prices around the world have gone up. Holland says that Spain’s backups have already been hurt by the ban.
“The suspension has made things worse in Spain, where volumes were already low,” Holland said.