Liquid gold: Olive oil in Spain is now priced at 6 euros a litre

The drought in Spain and rising production costs are all pushing up the price to record levels

Why is olive oil so expensive?

• Drought: The lack of much heavy rain and unusually high temperatures has withered many crops, including olives. In fact, the drought also has a knock-on effect on many of the following factors.
• Production costs: Inflation has driven up the cost of virtually every aspect of farming, from the price of raw materials and fertiliser to labour. In addition, the production process has become more expensive due to the increase in prices in the mills, while the scarcity of the fruit this year means it’s more expensive to fill each bottle of olive oil.
• Supply: All of the elements above have reduced oil production in Spain by a damaging 20%, which has naturally made the product much more costly. Conversely, unlike so many other items such as medication, there is actually no olive oil supply problem, since the increase in price has also reduced the demand.
• Speculation: Despite abundant stock, uncertainty in the market has led to speculation that olive oil supplies could run out, which has given sellers free rein to up their prices.

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