Spain is the world’s top producer of olive oil. It has the perfect climate for olive growth and takes full advantage of this. Given that olives and therefore olive oil are produced locally, why is olive oil more expensive in Spain than in many other countries?
This is a relatively new phenomenon. Whilst the price of olive oil in Spain used to be affordable, over the last year or so the price has skyrocketed. This is not good news when olive oil is a staple of the Spanish diet and an ingredient many Spaniards will use on a daily basis. Here’s what you need to know about olive oil prices in Spain?
How Much Has Olive Oil Increased In Price?
New data released by Spain's National Statistics Institute (INE) shows that the price of olive oil has increased by an incredible 52.5% over the past 12 months, correct as of August. This is the highest year-on-year increase in product price for over 20 years.
If we compare the price of olive oil in August 2023 to the price of the same product in March 2021, the price of olive oil has increased by a frankly unsustainable 114.8%. This makes the once staple product increasingly unaffordable to ordinary consumers and has landed olive oil with the nickname ‘liquid gold’ in the country.
In real terms this means that a product that used to be an everyday staple and is included on the ingredients list for most everyday Spanish recipes is now an occasional luxury.
Why Is Olive Oil So Expensive In Spain?
Spain is the world’s biggest producer of olive oil. More than half of the entire olive oil supply in the world is produced in Spain. Understandably this leaves many Spanish citizens frustrated that what is a nationally produced product is unaffordable in its home country. So why is olive oil so expensive in Spain?
The main reason is because the Spanish olive oil sector is very export-orientated. At present almost 80% of the olive oil produced in Spain is distributed to foreign markets. In real terms that equated to over 1 million tonnes of olive oil in 2020/21. As a result there is a relatively small supply left for local distrubution.
Another huge problem driving up the price of olive oil in the country is the sheer volume of olive oil Spanish people consume. The average Spanish person consumes 11 litres of olive oil per year. This puts pressure on sellers and drives up prices.
This means that in Spain, where olive oil consumption is much higher than most countries, larger stocks of olive oil are required, which means they are more vulnerable to price volatility.That is to say, if supermarkets and other sellers have to buy olive oil more regularly, they will be more exposed to price rises and likely to pass them onto consumers.
How Much More Does Olive Oil Cost In Spain?
Olive Oil is incredibly expensive in Spain right now: some shops are charging as much as €10 per litre). By contrast in Ireland consumers have recently reported prices of €4.70 per litre.Similar prices have been reported in other EU countries where olive oil consumption is relatively low.
And it is the average consumption of olive oil in a country that answers the question as to why prices are so much lower here. If the prices are much lower on the supermarket shelves that probably means the bottle wasn’t purchased recently, but was purchased in bulk before oil prices began to rise. Some supermarkets have olive oil on the shelves that could have been purchased as much as a year ago. This simply isn’t possible in Spain where demand, and therefore stock turnover and ordering, is so high.
This means that, for now at least, foreign consumers are better insulated from the volatility of price changes within the olive oil market. Their passion for olive oil and excessive consumption means that Spanish supermarkets and Spanish people are not.
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