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Date Published: 07/06/2023
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
![Liquid gold: Olive oil in Spain is now priced at 6 euros a litre](https://andaluciatoday.com/images/articles/23/06/2158525__11686132198_large.png)
No Spanish dinner table would be complete without a bottle of olive oil, but this staple product, like so many other food items, is quickly becoming unaffordable, with a litre now coming in at around 6 euros despite VAT cuts. And that’s just for the cheap stuff – fancier brands will set you back a whole lot more.
The Ministry of Agriculture, which has been keeping a keen eye on prices, has noted an alarming upward trend: during the week of May 22 to 28, 2023, extra virgin olive oil (EVOO) stood at 6 euros per litre, 78% more expensive than a year ago and 118% pricier than the average for the same dates in the four previous years.
Why is olive oil so expensive?
Spain is the largest producer and exporter of olive oil in the world, accounting for almost half of the global supply, so why is this staple commodity so very expensive in Spanish supermarkets? Well, according to the experts, there are several reasons that, should they continue, will make the cost of oil shoot up even further.
The following factors are directly related to olive oil production in Spain:
- 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.
Image: Freepik
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