Olive oil inside a machine at an olive oil factory (AFP)

Olive oil prices have reached new record highs due to severe droughts affecting major olive-producing countries, which are leading to supply constraints and a rise in oil theft.

According to a recent report from the United States Department of Agriculture (USDA), global olive oil prices reached $8,900 per ton in September due to "extremely dry weather" in the Mediterranean region. In August, the average price had already risen by 130% compared to the previous year, and the USDA noted that there were no indications of a decrease in prices.

Spain, the world's largest olive oil producer and exporter, has been grappling with an extended period of intense drought. The country also experienced its third hottest summer on record, with average summer temperatures 1.3°C higher than the usual levels, as reported by the state meteorological agency AEMET.

Data provided by the commodity market intelligence company Mintec indicates that Spain's olive oil production in the most recent season has plummeted to approximately 610,000 tonnes. This marks a decline of over 50% when compared to the typical production range of 1.3 to 1.5 million tonnes.

It is worth noting that Greece and Italy hold the positions of the second and third largest olive oil producers, respectively, as reported by the International Olive Council, an organization composed of member countries that collectively contribute to over 98% of global olive production.

'Liquid gold'

In September, the benchmark set by Mintec indicated that olive oil prices in Spain's Andalusia surged to €8.45 per kilogram ($9.02). This price level is the "highest ever recorded for Spanish olive oil" based on Mintec's data, which spans over two to three decades and reflects a year-on-year increase of 111%.

The remarkable increase in prices for this commodity, often referred to as "liquid gold", has even prompted some individuals to resort to theft.

It is worth noting that Turkey, another notable olive oil producer, has temporarily halted its bulk exports until November 1st due to the worldwide spike in prices.