The climate crisis is taking its toll on the olive oil industry, and prices are surging. Global olive oil production, centered in Spain, which provides half of the world’s olive oil supply, is expected to drop by almost 48% compared to the previous year. Climate change-induced droughts, heatwaves, and wildfires have led to a significant reduction in olive harvests for the second consecutive year, driving olive oil prices to unprecedented levels. According to data from the US Department of Agriculture, global benchmark retail prices reached a record high of $9,000 per tonne in October.
In August, the Spanish government’s production estimate confirmed the worst fears, marking a crisis in the oil market. Several Mediterranean countries have experienced dry weather and droughts, further diminishing olive supplies. Spain, the primary source of the oil globally, faced a harsh summer and devastating wildfires that severely impacted its crop.
Europe, which heavily relies on local olive supplies, is now facing the prospect of further shortages due to extreme weather damage to olive harvests for a second year. The world’s largest oil producer has resorted to importing supplies from South America to meet the rising demand. Global olive oil production is anticipated to decline to 2.4 million tonnes, according to the International Olive Council, which is less than last year’s harvest and falls significantly short of the global demand of about 3 million tonnes. This shortfall is primarily attributed to drought and extreme temperatures exceeding 40 degrees in Spain.
Moreover, extreme weather conditions have also affected other important olive-growing regions, including Greece, Italy, Portugal, Turkey, and Morocco, exacerbating the crisis. The olive oil industry, a significant component of the Mediterranean economy, faces unprecedented challenges as climate change disrupts traditional olive farming practices and leads to substantial production losses.