Olive oil in dire straits as prices spiral

Fears the price of olive oil may rise to €15 per litre in the coming months

It has been a bad year for olive oil.

Global production has halved after the last 12 months saw reduced rainfall and a mild winter in the world’s olive oil producing countries, with the result being a steep rise in retail costs.

“In large olive oil producing countries, there has been a reduced output in terms of production over the last two years,” agriculture ministry spokesman George Aristidou explained to the Cyprus Mail.

“This is true in Cyprus as well. Last year we saw production decrease, and this year it is expected to decrease yet again.”

He said countries like Portugal, Spain and Greece are all seeing the same results, and this impacts the market in Cyprus, which also imports quantities of olive oil.

“The impact on prices is that with reduced supply and increased demand, prices must increase, and here in Cyprus this problem has been exacerbated by reduced production at home as well,” he said.

Local farmers’ union PEA chairman Kyriakos Kailas said last month that extra virgin olive oil prices have doubled in the last year.

He said at present, the international going rate for olive oil is around €8.60 per litre, adding that global olive oil production has halved.

The rising prises have caused concern among consumers, especially as some experts predict the retail price of olive oil may increase to as much as €15 per litre in the coming months.

“One time when I went to my local supermarket, the brand I usually buy was not there at all. The next time, the brand was back on the shelf, but its price had increased by €3,” said Ioanna Stylianou.

“This is an outrage. I didn’t buy it. They are cheating us. The new olive oil obviously came from the same batch, and yet somehow it was €3 more expensive. It is not acceptable.”

A relative frenzy has already taken hold in Greece, where over 37 tonnes of olive oil – worth around €300,000 – were stolen from a warehouse in Halkidiki.

Shoppers were alarmed, too, when a sign appeared on the shelf of a supermarket in Cyprus instructing them to not buy more than two olive oil items per person.

Supermarkets’ association chairman Andreas Hadjiadamou was keen to reassure consumers, however, saying that these are isolated cases.

“There is no coordinated initiative among supermarket operators to limit the amount of olive oil consumers can buy due to shortages or any other reason,” he told the Cyprus Mail.

“This appears to be one supermarket which may have experienced shortages in its own particular supply chain. We are of course aware of global conditions and reduced production in Cyprus and in Europe, but limiting the amount of olive oil consumers can buy is not on our agenda.”

Asked about the issue of rising prices, he said supermarkets want to keep prices competitive. “None of us are in the business of extorting customers for the sake of it. We want to offer them affordable prices.”

But he warned supermarkets are not in ultimate control of olive oil prices.

“If prices increase for importers and suppliers, we cannot force ourselves into making losses, but we will do everything in our power to keep prices competitive and affordable,” he said.

Whether the root cause of this reduced olive oil production is down to a bad year or a potential consequence of climate change is not yet clear, according to George Aristidou.

And of course there are varieties among olive trees that are naturally more susceptible to alternate bearing – one year they have fruit, the next year none or very little, but this does not explain the drastic drop in production.

“We do not have enough data points to be absolutely certain on whether this is a result of climate change or not yet. Last year was a bad year, this year is expected to be a bad year, but the year before was a good year for olive oil,” he said.

“Olive oil production is down because of reduced rainfall and mild winters. In a lot of these places where they grow olives, they did not really have a proper winter last year.”

“However, to extrapolate a year or two years and to be certain that this is a consequence of climate change at this moment is something that we cannot yet do. Maybe in a few years if we begin to see a noticeable trend, we will be able to be more certain, but until then we cannot make sweeping statements,” he added.

But Kyriakos Kailas was more willing to point at climate change as a cause.

“Climate change and high temperatures have greatly impacted the issue of fruitlessness in all tree crops,” he said.

In light of this and increasing prices, he urged producers and retailers to “respect consumers and not make disproportionate increases in olive oil prices”.