July 16, 2024

Exploring the rise in olive oil prices

3 min read

Olive cultivation and processing to produce extra-virgin olive oil (EVOO) is a capital-intensive process and therefore carries a price premium, but recent market dynamics have seen a substantial spike in olive oil prices, affecting various olive oil categories: from high-end extra virgins to everyday blends.

Let’s take a closer look at what has shaped these spikes and why it has never been a better time to support local.

The global stage

While, physically, we’re far removed from Europe, as a net importer of vegetable oils we are directly linked to global events that are affecting the local prices of olive oil. The volatility in EVOO prices can be attributed to a complex web of factors that are reshaping the olive and vegetable oil market, resulting in increased costs and limited supply. Contributing to this price hike are supply and demand dynamics, adverse weather conditions affecting major producers like Spain and Italy, and even incidents of cooking oil theft.

Specifically, Spain, the largest producer of olive oil in the global olive oil market, recently experienced its third hottest summer, with average temperatures soaring 1.3°C above the norm. This prolonged heatwave, coupled with a two-year drought, significantly reduced Spain’s olive crop and olive oil supply, causing prices to rise.

Similar reduced production is being witnessed in other olive oil-producing nations such as Italy and Greece, further compounding supply shortages. The conflict in Ukraine, which typically contributes half of the world’s sunflower oil supply, has caused a reduction in sunflower oil production – leading to price increases across the entire vegetable oil market.

Furthermore, the decision by Turkey to suspend bulk olive oil exports due to rising local prices and heightened global demand has further limited the availability of olive oil and vegetable oil, resulting in higher prices.

The local picture

These factors have all contributed toward volatile pricing of olive oils and vegetable oils on our local shelves. According to the South African Olive Association in its 2022 Fact Sheet, an estimated 5 to 6 million litres of olive oil are imported (mainly from Spain, followed by Italy, Portugal and Greece) compared with the local olive oil production, exclusively extra-virgin, which accounts for an estimated 1.5 to 2.0 million litres annually. As a net importer of olive oil, this leaves South Africans vulnerable to increased prices.

This, in turn, presents a fantastic opportunity to support our local olive farmers by buying homegrown EVOO. The majority of South African olive farms remain relatively small, with almost half of the SA Olive Association’s 200 registered olive growers operating on farms of less than 5 hectares.

Despite their small size, however, South African olive oil has performed incredibly well on the international awards circuit, with several local farms receiving top prizes in categories that are traditionally dominated by Spanish and Italian olive oils. 

A commitment to local farmers

African Gold, a premium EVOO blend produced by Southern Oil (SOILL), is taking proactive steps to support local olive farmers – and is calling on all South Africans to support local when choosing olive oil. African Gold believes the exceptional olive oil produced locally should be celebrated and, therefore, collaborates with local farmers to ensure they are paid fair prices for their delicious liquid gold, which is then used to create its delectable extra-virgin blend.

African Gold exclusively sources the finest local olive oils, emphasising its commitment to boosting local EVOO production. This brand, which was introduced in 2021, represents not only a premium product but also a testament to creating job opportunities, improving trade standards and enriching local communities.

African Gold’s perfectly balanced medium-to-intense EVOO boasts a fresh, green aromatic fruitiness, distinct pepperiness and pleasant bitterness, making it an ideal finishing touch for various dishes. By utilising the collective resources of SOILL, the driving force behind African Gold, it ensures local farmers’ hard work never goes to waste.

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