Rapid Price Increase:
Olive oil, a staple of Mediterranean cuisine, has witnessed a remarkable surge in price, particularly in Southern European countries where it is primarily produced. In January 2024, Portugal experienced a staggering 69.1% increase in olive oil prices compared to the previous year, surpassing the EU average of 50%, as reported by Eurostat.
Substantial Price Hikes Across Europe:
Spain, the largest olive oil producer globally, saw prices spike by 62.9% in January compared to the previous year. This trend is reflective of a broader phenomenon across the EU, where annual inflation for olive oil accelerated from 37% in August to 51% in November 2023.
Variations in Price Increases:
Each EU country reported significant rises in annual olive oil inflation, with Portugal, Greece, and Spain leading the pack. Even countries with relatively lower price increases, such as Romania (13%), experienced notable inflationary pressures.
Factors Driving Inflation:
The sharp inflation in olive oil prices is largely attributed to adverse weather conditions, including droughts and extreme heatwaves, particularly in Spain, where production halved in 2023. Additionally, the strong demand for olive oil in Mediterranean countries, coupled with significant export volumes from countries like Spain, has further fueled price hikes.
Future Outlook:
With the 2023/24 crop year already experiencing drought-related challenges, experts anticipate further increases in global olive oil prices. Spain’s leading agricultural union forecasts that production will remain below 1 million tonnes for a second consecutive harvest, underscoring ongoing supply constraints and potential price pressures in the olive oil market.
SOURCE: Ref Image from India Mart
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