In recent years, the price of olive oil, often called “liquid gold,” has been soaring. However, experts suggest that some European regions are experiencing the “best harvest” in three years, indicating that the upward trend in prices is likely to slow down.
According to data from Statistics Canada, the average price of one liter of olive oil was $16.40 in August 2024. Although it has dropped slightly from $16.68 a month earlier, it is still higher than the average price of $12.89 a year ago.
Last Wednesday, on November 27th, Mike von Massow, a food economist at the University of Guelph, mentioned to Global News that prices may not drop below the levels seen during last year’s surge but could still decrease by a few percentage points.
Expectations are that olive production will return to normal levels, leading to an overall decrease in prices as new products enter the supply chain. Factors such as the time needed to rebuild inventory and the quality of olives will determine regional market prices.
“I believe one thing we can anticipate is that the volatility of prices for olive oil and similar products will increase in the future, as we witness more frequent and extreme weather events,” said von Massow.
Half of the world’s olive oil is produced in Spain. Miguel Ángel Guzmán, Chief Sales Officer of Doleo, the world’s largest olive oil producer in Spain, mentioned in an interview with Sur that price decreases are expected to start in November, but current purchase and inventory levels are not sufficient for a significant price drop.
“If weather conditions and harvesting remain stable in the coming weeks, it is expected that original prices will begin to ease between November, December, and January,” he shared. “Signs indicate that if everything progresses normally, especially if rainfall continues to be favorable for production, we may see a downward trend in prices throughout 2025.”
Extreme weather events are not only occurring more frequently but are also becoming more severe, potentially having a significant impact. Von Massow noted that if parts of Europe experience drought again next year, olive oil prices could repeat the same pattern.
International olive oil expert Fil Bucchino informed Global News that price increases are due to supply chain constraints resulting from the Ukraine conflict, rising inflation, increased production and transportation costs, and climate change.
Bucchino, who previously mentioned in March that Spanish olive oil production dropped by 62% last year, highlighted the range of challenges faced from severe droughts to heavy rains, hailstorms, and olive fly attacks.
“Over the past three years, everyone has been hit one after another, and now in Tuscany, we are seeing the best harvest in about three years, but relatively, the situation is still not as good; it’s just slightly better than in recent years,” said Bucchino.
While olive plantation conditions have improved, it doesn’t mean prices will suddenly drop back to 2020 levels. Though Tuscany may have better olive growth this year, other regions may see minimal growth.
“We are not producing enough olive oil or extra virgin olive oil to meet current demands,” Bucchino noted. “Due to the inability to ramp up production quickly, prices will remain at a certain level.”
“Labor costs have increased, transportation costs have risen, packaging costs have increased,” he added. “So, will prices return to the levels of last year or the year before? It may not, but they could approach those figures again.”