The Olive Oil Price Puzzle: Unraveling the Mystery of Falling Prices in the EU
In a surprising turn of events, olive oil prices across Europe have taken a dive, leaving producers and consumers alike scratching their heads. But why is this happening after years of steep price hikes? Let's dive into this intriguing story and explore the factors behind this unexpected decline.
A Tale of Rising Prices
From 2021 to 2024, olive oil prices skyrocketed, with annual increases ranging from 4.1% to a whopping 34.4%. In fact, during several months in 2021 and 2023, price inflation exceeded 50% in the EU. So, what caused this dramatic rise?
According to Mariana Matos, General Secretary of Casa do Azeite, the Portuguese Olive Oil Association, the answer lies in a perfect storm of events. "The extreme drought that affected the entire Mediterranean region, particularly Spain, combined with low stocks, left producers with no choice but to increase prices to regulate the market," she explained.
A Sharp Decline in Production
Data from the International Olive Council (IOC) paints a clear picture: EU olive oil production took a nosedive in recent seasons. In the 2022/23 season, production plummeted by 39%, dropping to 1.39 million tonnes from 2.27 million tonnes the previous year. While output recovered slightly to 1.55 million tonnes in 2023/24, it remained well below the average.
However, provisional figures suggest a turnaround, with production expected to reach approximately 2.11 million tonnes in the 2024/25 season. The IOC attributes this improvement to the devastating heatwave of 2022, which significantly impacted key olive-producing countries in the Mediterranean region.
"In any market, variations in supply directly influence price movements," an IOC spokesperson emphasized. "The sharp decline in production led to upward price pressures, but as supply begins to normalize, we're seeing a corresponding decline in prices."
Spain Leads the Way in Price Declines
Spain, the EU's largest olive oil producer, accounting for over 65% of EU production in the last season, saw the most significant drop in olive oil consumer prices in 2025, at 38.9%. Greece followed with a decline of 29.2%, and Portugal at 24%. These three countries experienced price falls exceeding the EU average.
Among the EU's 'Big Four', France saw the smallest decline, while prices fell more sharply in Italy and Germany. Interestingly, the largest price increase was recorded in Albania, followed by Romania.
The Role of Poor Harvests and Energy Costs
Rafael Pico Acevedo, Director of the Spanish Olive Oil Exporters Association (ASOLIVA), sheds light on the impact of consecutive poor harvests and rising energy costs. "Over the past two years, these factors, combined with supply shortages, pushed consumer prices to unprecedented levels," he said.
However, the significant improvement in production in the 2024/25 season, particularly in southern Europe, has helped normalize supply and ease these pressures, resulting in pronounced price declines. Acevedo emphasized that the differences between countries reflect their position within the value chain, with main producing countries experiencing more direct and visible impacts.
Mariana Matos adds that lower demand, driven by earlier price rises, is also contributing to the price decline. "As supply returns to average levels and consumption falls, we're seeing a natural correction in prices," she explained.
And Here's Where It Gets Controversial...
While the data suggests a straightforward supply and demand story, some experts argue that other factors, such as changing consumer preferences and the impact of climate change on long-term production trends, could play a more significant role in the future. What do you think? Are we witnessing a temporary blip or a more permanent shift in the olive oil market? Share your thoughts in the comments below!
