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Olive oil in 2024: On markets, climate, and adaptation
04 January 2024

2023 was not the best of years if you're into olive oil. Consumers have been hit by soaring olive oil prices. Many people have reached out to ask about the reason, or to comment on the economic impact for producers. Here's a breakdown of what's going on and how it affects everyone.

Instinctively, people tend to attribute soaring prices to speculation. There is some truth in that, in the sense that there will always be bad actors looking to profiteer off misfortune and uncertainty. The sad truth, however, is that there's more than profiteering going on. Trees are suffering, and that's a bad sign for everyone.

A perfect storm in the market

Let's start with the market-oriented analysis. Simply put, prices are going up because production is going down. This trend started in 2022, and it has accelerated in 2023.

In 2022, it was mostly Spain that suffered. Spain is the world's top olive oil producer, typically supplying about 40% of global output. In 2022 Spain's production was halved, but Greece and Italy stepped up and covered the loss to some extent. Not so in 2023.

In 2023, the total Mediterranean oil production was down by 41%. So global olive oil production has substantially decreased, while at the same time we have increasing demand and general inflation of prices. This perfect storm has sent olive oil prices through the roof.

Prices of extra virgin olive oil from Spain jumped by more than 80%, according to the European Union. The price of Italian oil increased by 66%, and Greek olive oil went up by 96%.

This year all three countries suffered severe production shortages, which means prices for the 2024 export season are expected to rise even more. But that does not mean that olive oil producers are getting rich - on the contrary.

Reduced production and rising fertilizer and energy costs is another perfect storm on the production side. In other words, everyone loses. The only ones looking to profit off it all are fraudsters. The so-called “agri mafia” in the Mediterranean oil producing regions has been moving in to fill the gaps in supply.

We have seen reports of "fake olive oil" plaguing markets. Fraudsters have been trying to pull tricks such as mixing high-quality extra virgin olive oil with lower grade alternatives, or even using coloring substances to give lower grade oil the green or buttery yellow hues characteristic of olive oil.

There have also been many olive theft reports, both in the news and in our own network. This was not exactly unheard of previously, but it has gone from rarity to widespread practice. Having branches or even entire trees ripe with fruit being chainsawed is a traumatic experience for farmers and trees alike.

The climate's impact on agriculture

The most disconcerting part of it all is what lies behind these market signals. In Spain, the olive oil industry is under threat from desertification. Reportedly more than a fifth of Spanish land is at high risk of becoming infertile.

Prolonged drought and heatwaves have impacted all Mediterranean oil producing regions. That has reduced the olive harvest and affected the production of olive oil, and Cricket Hill was not unaffected either.

In the summer of 2023 heat gripped swaths of the Mediterranean region, bringing a “heat hell” scientists say would have been virtually impossible without climate change as CNN notes. Besides heat, however, there are more ways in which the climate is having an impact on agriculture.

May is the blooming season for olive trees, and it's when they're most vulnerable. Like everywhere in the Mediterranean, May 2023 was very hot on Cricket Hill. Excessive heat means that blossoms are at risk of being destroyed before they get the chance to produce fruit. But that was not what got us this time.

A combination of excessive heat, temperature fluctuation and humidity may lead to extreme weather phenomena. This is precisely what happened in May 2023, with a number of hailstorms hitting the Ancient Olympia region. Hailstorms wreaked havoc on olive oil production, stopping most of it dead in its tracks.

Unfortunately, it seems there’s more bad news in store. High temperatures can impair olive trees' ability to convert sunlight into energy, and prolonged dry spells can prevent them from producing shoots, buds, flowers, and fruit.

According to agronomists we consulted, that also applies to winters. When faced with prolonged periods of overly warm and fluctuating winter temperatures, such as the ones in 2022 and 2023, olive trees cannot get the rest they need to recuperate fully before the next blooming season.

Adapting to a harsh reality

In a nutshell, 2023 was a bad year, and we're looking at a prolonged crisis. What can we do about it? There are different ways to answer that question, depending on the perspective.

At the highest level, adopting sustainable practices and pressuring peers, governments and other organizations alike to act in the same way seems like a good place to start. Climate change is both complex and politicized, but let's just say that having some common sense and respecting planetary boundaries should be within everyone's reach.

Consumers should understand the realities of the market and agricultural production. As always, do your research before you buy. Understand that most producers are more affected than you are. It's a harsh reality we all have to adapt to, and we have a better chance of doing that if we work together.

Producers should keep an eye out and do everything within their power to prepare for and mitigate risks. On our side, we plan to spend more time on Cricket Hill this year. We're aiming to purchase and install nets that can protect olive trees in case of hailstorms, and keep a close eye on our olive trees.

On the bright side, our stock still lasts! We are very modest with our consumption, and we notified our friends to economize as well. If you want to pre-order for 2024, now is a good time to do that. Reach out and let us know!.