Mediterranean drought leads to spike in olive oil prices.
The drought that hit major olive producers around the Mediterranean has had a significant effect on consumers all over the world with the price of extra virgin olive oil surging by nearly a quarter this year.
Olive oil production in Greece, Italy, Tunisia and, to a lesser extent, Spain is expected to decrease in 2017 sharply.
The International Olive Council (IOC) expects global output to fall 14 percent in this year, while in Italy production may be halved in the 12 months to September.
Greece will be down 20 percent and Tunisia 17 percent, while Spanish output is likely to face a drop of seven percent.
The limited supply along with the surge in prices has already reined in demand for olive oil in Europe.
However, demand in Australia, China and Brazil remains robust with imports increasing rapidly.
“We have had bad weather affecting production three years out of the last five,” said Vito Martielli, a grains and oilseeds analyst at Rabobank, the Dutch bank that specializes in food and agriculture financing.
Back that Hass up: Global demand for #avocados skyrockets, pushes prices to record highs https://t.co/htLU4DfJdfpic.twitter.com/hBYLQ1ixvk — RT America (@RT_America) May 1, 2017 The more persistent declines in output and decreasing inventory levels make the market extremely vulnerable to price rises.
Industry experts are warning that this year’s spike in wholesale prices is likely to reach consumers across the globe.