April 16, 2024

Athens News

News in English from Greece

Why is olive oil 17 times more expensive than oil?

Olive oil seems to be made of gold… At the same time, prices for the national product are the highest! But why is this happening? The Economist tries to analyze with interesting statistics.

Stormy weather and cyclones resulting from climate change in Mediterranean countries appear to have pushed olive oil prices to high levels. And the worst thing is that, according to the Economist, de-escalation of the situation is not expected. It is noted that olive oil has become 17 times more expensive than oil!

According to The Economist’s data on prices in countries without their own production, olive oil has become a luxury item. And it tends to become a “privilege of the few”, even for those living in the Mediterranean. Prices hit a record high in September, jumping 117% year on year, according to the International Monetary Fund. The cost of olive oil quickly became 17 times higher than the cost of crude oil. In 2019, note, the price was seven times cheaper.

Olive oil has been a mainstay of the Mediterranean diet… forever. Spain remains the world’s largest producer, followed by Greece and Italy. Olive oil production in the Mediterranean covers 70% of international demand for the product. However, the increase in demand coincides with a decrease in supply due to production cuts, like a chain reaction.

Extended heat waves, droughts and extreme weather events appear to have contributed to the decline in production. Add to all this one more thing: a disease that is spread on the olive tree by insects (the olive moth), believed to have been introduced from Costa Rica in 2008. Since then, it has destroyed about 21 million trees!

Rising interest rates and input costs for producers have further increased already high prices. Besides Türkiyeone of the few countries that had a good year in terms of production, banned the export of olive oil, trying to keep domestic prices low.

Thus, olive oil and the raw materials for its production became a valuable commodity that began to be stolen. A typical case is the theft of olive oil worth €500,000 from a warehouse in Cordoba, Spain.

Similar phenomena have been recorded in Greece. Experts estimate that olive production in the 2023-2024 season will be about 33% lower than the average for the last four years.

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