Why is olive oil so expensive now?

[ad_1]

There’s something different lately about the olive oil that Michelle Spangler buys, bottles and infuses with flavors like basil and blood orange for her Dallas store. It’s not the taste but the cost: Global olive oil prices have soared to record levels, more than doubling over the past year.

Ms. Spangler has an agreement with her store’s supplier that protects her against such rapid price increases, but she still expects to pay up to 20 percent more. She plans to raise prices 10 to 15 percent at her store, Infused Oils & Vinegars, early next year.

“It’s not a cheap product,” Ms. Spangler said, “and that will probably cause some of my customers to lose that line of products in my store.”

Like oil that comes from the earth, olive oil is a globally traded product, and events in one part of the world impact faraway places. Drought in Spain, the world’s largest olive oil producer, has devastated recent harvests, and bad weather has affected olive crops in other major producers such as Italy, Greece and Portugal. The United States imports almost all of the olive oil it consumes, mainly from Spain and Italy.

The result is that prices are rising to dizzying heights, well above $9,000 per metric ton, seeping through more expensive bottles of the oil that have become a fixture in many American homes, used for cooking and sprinkle foods associated with a healthy diet. Mediterranean diet. A 750-milliliter bottle of Bertolli extra virgin olive oil that cost about $9 at the supermarket last October costs about $11 today, an increase of nearly 22 percent, according to IRI, a data provider.

Southern Europe, which accounts for more than half of the world’s olive oil production, is to olive oil what the Middle East is to crude oil. AND Things don’t look good for the next European harvest, which began this month: the European Commission recently said that olive oil production in Spain, Italy and other European Union countries would recover only slightly from last season’s 40 percent drop, which would limit supplies and drive up prices.

Olive oil has become so expensive that it has attracted criminal gangs, with some particularly brazen thefts from farms and factories in Spain and Greece.

“Consumers are just going to face higher prices,” said Shawn Addison, owner of Olive Oil Source, an olive oil wholesaler in California that supplies grocery stores and restaurants.

In July, Addison received an email from her largest supplier, which sources its oil from Australia and California, informing her that the price of wholesale olive oil was rising more than 30 percent, effective immediately. Soon after, its second and third largest suppliers followed suit.

“Everyone jumped on the bandwagon and immediately raised prices.Addison said, noting that it showed how global markets work. On Tuesday he placed a purchase order for olive oil at $39.50 a gallon, which until recently had cost him $29.50.

Some companies like Addison’s are looking to the southern hemisphere for more olive oil, but the impact of shortages in the Mediterranean may be difficult to avoid as the scramble for dwindling supplies makes it harder to reach an agreement on Chile or Argentina. olive oil.

Leah Bradley, chief financial officer of Veronica Foods, an olive oil supplier in California that counts Ms. Spangler’s Infused Oils & Vinegars among its customers, said South America and Australia had good crops last year, which helped mitigate part of the damage in Spain. . “Relying on one hemisphere, one country or one region is not sustainable,” she said.

Because olive oil is produced in so many different parts of the world, the fear among sellers is not so much about shortages as about how much consumers are willing to pay.

At Olive Oil Source, Addison hasn’t noticed a drop in sales, which surprised him. In fact, he has seen a 20 percent increase since July, even though he has passed on all the “seized” costs he pays to his suppliers. He said he hoped the business would remain lucrative.

The ability and willingness of consumers to bear the burden of higher prices has surprised economists and repeatedly defied predictions of a slowdown. But rising prices for some goods may be approaching the point where shoppers will eventually reduce their spending.

Jesse Shapell, owner of Barboncino, a Neapolitan-style pizzeria in the Crown Heights neighborhood of Brooklyn, New York, said he had really noticed the most recent increase in the price of olive oil in recent weeks. If prices continue to rise, he may have to use less, he said.

“As a small business already operating on slim margins, the rising cost of an essential ingredient like olive oil creates another challenge in bringing affordable, high-quality pizza and cuisine to our community,” Shapell said.

Gray Brooks, owner of Pizzeria Toro in Durham, North Carolina, said olive oil was crucial to giving his pizza crust the flavor and texture he described as a “hybrid between traditional pizza dough and focaccia.” “.

The rising cost of olive oil, which Brooks sources from Italy, forced him to raise prices this month by 5 to 10 percent, he said, with about half of the increase due to the cost of olive oil. Most of his pizzas went up $1, and some went up $2, like the lamb meatball and venison sausage pies.

He won’t change his recipe, but said rising food costs had made his job more difficult and olive oil was the latest headache.

“A lot of people like me are feeling the weight of this,” he said.

[ad_2]
Source link

Check Also

We have to win the polls first, says Kharge on INDIA bloc PM election | Lok Sabha Election News | Trending Viral hub

[ad_1] Congress president Mallikarjun Kharge during a press conference for the release of the party’s …

SC slams EVM critics, says no attempt should be made to bring down system | Lok Sabha Election News | Trending Viral hub

[ad_1] 5 minutes of reading Last update : April 17, 2024 | 00:21 IS The …

Smartmatic and OAN settle defamation lawsuit | Trending Viral hub

[ad_1] Election technology company Smartmatic settled Tuesday in its defamation lawsuit against One America News …

Leave a Reply

Your email address will not be published. Required fields are marked *