Spiking olive oil prices might finally be on track for relief. Here’s why

Olive oil prices have skyrocketed in the past few years, but experts say some parts of Europe that produce it are seeing the “best harvest” in about three years.

And while it won’t happen right away, those conditions could mean the price spikes will ease up.

According to Statistics Canada, one litre of olive oil cost $16.40 on average in August 2024. While it is a drop from the $16.68 just a month previous, it’s still higher than the $12.89 average price one year ago .

Mike von Massow, food economist at the University of Guelph, said in an interview Wednesday that prices may not drop below the increase seen in the past year, but could still improve by a few per cent.

He attributes this to olive yields expected to return to “normal” and with that new product coming into the supply chain, prices should come down. Factors like how long it takes to rebuild stock and the quality of the olives could determine what consumers see.

“Not all olive oil is the same, but we should see overall decrease in price and the relative price will depend on the quantity of both things,” von Massow said.

“I think one of the things that we can expect to see going forward is greater variability in the price of things like olive oil, because we’re seeing more frequent, extreme weather.”

As extreme weather hits not only with more frequency, but greater severity, it can have a big impact and von Massow said if a drought is seen in parts of Europe again next year, olive oil could be “back into the same boat.”

Fil Bucchino, an international olive oil expert, told Global News on Wednesday the rise in price was due to a “perfect storm” of impacts on olive harvests.

The issues ranged from supply chain constraints due to the war in Ukraine, inflationary hikes to production and transport costs, and, as von Massow noted, climate change.

The biggest producer, Spain, saw its production of olive oil down 62 per cent last year, which meant more difficulty in pricing worldwide, Bucchino told Global News in March.

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“We went from crazy droughts to torrential downpours to hailstorms to olive fly attacks,” Bucchino said.

“The past three years, everybody was hit by something back to back and here in Tuscany right now, we’re seeing, quote unquote, the best harvest we’ve seen in about (three) years … In relative terms, it’s still not that great, it’s just better than years past.”

Though there have been some turnarounds in olive groves, Bucchino cautioned it did not mean we’d see a sudden reversal of prices back to that of 2020.

Part of this, he said, is because of the regional aspects in that while Tuscany may be having a better year for olive growth, other areas may have seen little growth at all.

“We’re not producing enough olive oil or extra virgin olive oil in the world to meet the present demand as it stands,” Bucchino said. “The pricing is going to be at a certain level because we can’t produce fast.”

Von Massow said he doesn’t anticipate shortages in part due to an expected good harvest, but he said there are still factors that could come into play in terms of how much it would be for Canadians to pick up a bottle when they’re at the grocery store.

“We know labour costs have gone up, we know transportation costs have gone up, we know packaging costs have gone up,” he said. “So are we going to go back to what we paid for it last year or the year before? Probably not. But we will likely begin to get closer to those numbers again.”

—with files from Global News