Climate crisis goes for olive oil, prices surge | Latest News India - Hindustan Times
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Climate crisis goes for olive oil, prices surge

Oct 29, 2023 03:35 PM IST

In a forecast in May, global price-setter Spain, the source of half the world’s olive oil supply, said production is expected to fall nearly 48% over last year

The healthiest of cooking oils is now the priciest too, thanks to climate change impacting plantations in the world’s production hub – southern Europe.

Global benchmark retail prices rose to a record high of $9,000 per tonne in October (Representative Photo)
Global benchmark retail prices rose to a record high of $9,000 per tonne in October (Representative Photo)

Droughts, heatwaves, and wildfires linked to climate change in key producer countries have nearly halved the world’s harvests of olives for the second straight year, driving up olive-oil prices to a record.

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Global benchmark retail prices rose to a record high of $9,000 per tonne in October, according to US Department of Agriculture data.

An August production estimate by the Spanish government proved the worst fears – a crisis in olive-oil markets. Several Mediterranean countries suffered dry weather and droughts, further skimping supplies.

In a forecast in May, global price-setter Spain, the source of half the world’s olive oil supply, said production is expected to fall nearly 48% over last year. A severe summer and wildfires in the world’s biggest producer had decimated much of its crop.

The supply crunch is said to be worse than last year, and its impacts are rippling across food markets, restaurants and homes, from Europe to US and India, traders say.

“Prices of the extra virgin imported variety in India are up by 22%. Restaurants are most likely to pass this off to customers,” said Abhishek Agrawal of Comtrade, a commodities-trading firm.

India consumes about 12,000 metric tonnes of olive oil annually, most of which is imported, according to the Indian Olive Association.

In May, the Italian government called a crisis meeting after a 20% jump in pasta prices, partly driven by olive oil, which triggered political protests.

Spain’s production in the 2023/2024 crop year has been about a third lower than the four-year average, according to official figures.

“I have stopped using olive oil for salad dressings and switched to canola oil for cooking,” said Ritu Grover, a New Delhi-based banker who switched to olive oil years ago after suffering from high levels of bad cholesterol.

Olive-oil prices in Spain will remain at record levels at least until June, a Reuters report on October 26 said, quoting Deoleo, the world’s largest olive-oil producer, and this will feed into all importing countries, including India.

The US Department of Agriculture has cut its global olive-oil production estimate down to 2.5 million tons, a quarter lower than the five-year average. Back-to-back droughts and wildfires in southern Europe point to climate-change linked extreme weather, experts say.

Spain recorded its third hottest summer this year, with average summer temperature 1.3 degrees C higher than normal, according to the state weather agency AEMET.

“Climate change is changing the way Europe grows food,” Dorothy Azory, the leader of an olive growers’ federation in southern Europe stated in their journal last month.

Research by the World Weather Attribution (WWA) service last year found that climate change had made drought at least 20 times more likely in Europe, with implications for global and continental food security.

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