September 20, 2023: The price of olive oil has reached unprecedented levels due to a Mediterranean drought that poses a significant threat to olive supplies.

In September, global olive oil prices surged to $8,900 per ton, driven by arid weather conditions in the Mediterranean, according to a report from the United States Department of Agriculture (USDA). 

The average price in August was 130% higher than the previous year and showed no signs of easing, as reported by the USDA.

Spain, the world’s largest producer and exporter of olive oil, has been particularly impacted by an intense and prolonged drought. Additionally, Spain experienced its third hottest summer on record, with average temperatures 1.3°C higher than expected, according to the state meteorological agency AEMET.

Data from commodity market intelligence firm Mintec reveals that Spain’s olive oil production in the recent season plummeted to approximately 610,000 tonnes, a drop of over 50% compared to the usual production range of 1.3 to 1.5 million tonnes.

The situation is further complicated by concerns about reduced production in other major European olive oil-producing countries grappling with drought conditions, including Italy and

Greece. According to the International Olive Council, Greece and Italy are the second and third largest producers of olive oil globally.