In a stark indication of the changing climate and its sweeping impacts, Europe’s local olive oil supplies are dwindling at an alarming rate. Over the past few years, extreme weather conditions, including rampant wildfires and severe droughts, have substantially impaired olive harvests, pushing the continent to the brink of an olive oil crisis.
An Alarming Depletion
Spain, a country responsible for half of the global olive oil supply, now holds a concerning 115,000 metric tons of olive oil stock. To put this into perspective, the monthly depletion rate stands at approximately 60,000 tons. Market experts are sounding the alarm that if this depletion rate continues unabated, olive oil supplies could be entirely exhausted before the next harvest season, which traditionally begins in October in Spain.
Global Olive Oil Production Takes a Hit
The situation is further compounded by a significant reduction in global olive oil production, expected to plummet to 2.4 million metric tons this year. This figure starkly contrasts with a global demand of 3 million. Spain’s forecasted production of 650,000 tons is a far cry from the typical 1.3 million, reflecting the severity of the crisis.
Countries across the Mediterranean, from Greece to Morocco to Italy, are feeling the sting of drought, affecting their olive yields. For instance, Greece’s olive oil production is anticipated to be a mere 200,000 tons this year, a third less than the previous year.
Escalating Prices and Export Bans
This significant shortfall in olive oil production is driving prices to unprecedented heights. A kilogram of extra virgin olive oil cost 852 euros earlier this month, more than quadrupling its price from 2020. The price per ton in August was 130% higher than the previous year, swiftly breaking records set in 1996.
Some countries, including Tunisia, Turkey, and Syria, facing the international price hike, have initiated export bans on olive oil to safeguard their domestic supplies.
The Domino Effect
The crisis does not stop at depleting supplies and skyrocketing prices. Recently, a significant heist in Córdoba, Spain, saw the theft of $500,000 worth of the coveted “liquid gold.” This incident underlines the desperation and extent of the current olive oil crisis.
Despite the soaring prices, farmers find little consolation as they grapple with the multifaceted challenges of reduced harvests, escalating energy, and labor costs, resulting in a substantial hit to their incomes.
A Call to Attention for Entrepreneurs and Investors
As Europe grapples with this unprecedented crisis, it sends a clear signal to entrepreneurs and investors worldwide. The olive oil scenario underscores the critical need for innovative and sustainable solutions to address the challenges posed by climate change, ensuring the resilience and robustness of global agricultural supply chains.
The current olive oil crisis in Europe serves as a cautionary tale, underscoring the need for proactive action, innovation, and strategic investment to safeguard and strengthen the critical sectors of our global economy against the growing threats of climate change and extreme weather events. Entrepreneurs and investors now, more than ever, hold the keys to fostering resilience and sustainability in our global markets, ensuring their robustness for generations to come.