Price of olive oil expected to rise again as European crops feel the heat

Extreme heat, prolonged drought and wildfires have dealt a severe blow to European agriculture, prompting warnings of reduced food production and rising prices for key commodities such as olive oil. Farmers across the continent are reporting widespread damage to crops ranging from salad greens to cereals, with olive groves particularly affected due to the intensifying effects of the climate crisis. As temperatures reach record highs, experts predict further increases in the cost of olive oil, which has already been climbing steadily over the past two years. Across France, the vegetable growers' association Légumes de France has estimated that thousands of tonnes of produce, worth tens of millions of euros, are lost annually due to the current climatic conditions. Crops such as salad leaves, carrots, leeks, garlic, and onions face potential reductions of up to 50%, primarily due to insufficient rainfall. In wine-producing regions like Champagne, Bordeaux, and Burgundy, the impact of the heat has delayed grape maturation, leading to expectations of an early harvest beginning as early as mid-August. This would mark the earliest harvest in several decades, with anticipated yield reductions of approximately 10% compared to last year. Spain's agricultural ministry forecasts a significant decline in its 2026-27 cereal crop, projecting a drop from 24 million tonnes to just over 18.5 million tonnes. This prediction comes prior to assessing the damage caused by recent wildfires. Despite these challenges, Spanish farmers have adapted through the cultivation of heat-resistant crop varieties and increased reliance on irrigation systems. Nevertheless, the overall outlook for European crops remains grim, with the EU revising downward its projections for several key commodities. Sunflower production, crucial for cooking oils, is expected to decrease by 7%, while grain maize is projected to fall by 6% and potato and soybean yields are anticipated to decline by 3%. Some nations within the EU have fared better than others. Romania has experienced more favorable rainfall conditions, and Italy's wheat crop has shown resilience against the harsh weather. However, the agricultural trade body ASAJA reports extensive damage from wildfires, impacting citrus fruits, avocados, almonds, vineyards, vegetables, and olive groves. Water scarcity and extreme temperatures have further exacerbated issues with tomato and maize production. Olive oil producers anticipate yet another surge in prices this year as growers grapple with a confluence of extreme heat, drought, and, in some instances, wildfires. Groves in Greece, Italy, and Portugal have faced destruction from fires, while neighboring areas have endured the adverse effects of airborne ash and deteriorating air quality. These environmental pressures have also led to an uptick in pest infestations, diseases, and severe weather events, all contributing to diminished fruit size and lower yields. Despite a temporary dip in global olive oil prices following a peak two years ago, driven by heightened demand and climatic factors, the average price for a one-liter bottle of extra virgin olive oil in UK stores continues to hover above £7. Recent months have witnessed a renewed upward trend in pricing, signaling continued pressure on consumers. Sarah Vachon, founder of the Citizens of Soil olive oil group, emphasized that unless weather patterns stabilize soon, further price hikes are likely during the autumn season, given the anticipated shortage of olives suitable for oil production. Walter Zanre, head of the UK branch of olive oil brand Filippo Berio, underscored the ongoing challenges faced by producers, highlighting the need for immediate action to mitigate the long-term impacts of climate change on agricultural output. As the situation unfolds, stakeholders continue to monitor developments closely, anticipating further adjustments in both supply chains and consumer markets.