The reason for this tremendous increase is due to the wonderful world of economics and the theory of supply and demand. The demand for olive oil remains high but the supply in several European countries has been diminished by bad weather, increased insect attack, and bacterial blight. It has been called the “black year” for olive crops and it will take some time to recover. Most of the olive oil sold as retail in the US is imported and almost all of the sources are experiencing problems.
Spain, the largest producer has had an above normal heat wave and this will cause a reduction of the olives. Farmers in Italy are reporting a probable reduction of 40 to 50% due to weather and large flocks of starlings destroying the fruit. Morocco and Tunisia have also had bad weather and will produce less of the vital olives. And Syria, believed to be the first location of these precious trees with some 74 million, has been affected by the civil war.
The short term trend of a price increase is clear but the longer term is in question. If experience is any guide, the price may come down but it will happen slowly. When a high water mark price is reached, it seldom returns to a norm. Substitutes anyone?