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Olive oil
Olive oil prices have fallen sharply. Photograph: Photo3/Alamy/Alamy
Olive oil prices have fallen sharply. Photograph: Photo3/Alamy/Alamy

Olive oil price slide dents key southern European export

This article is more than 11 years old
Slump in the price of premium extra-virgin olive oil will hurt the struggling economies of southern Europe

Just when the struggling economies of southern Europe thought their finances could not get any worse, along comes a price slump in one of their key exports – olive oil.

Spain, Italy and Greece are the largest producers of the Mediterranean staple, accounting for 70% of the world's olive oil output. But they have been hit by a slump in the price of premium extra-virgin olive oil to $2,921 (£1864) a metric tonne in April 2010, IMF figures show. This compares with a price of $3,226 in April 2011 and $4,875 in April 2007.

The olive oil price is now at its lowest level since 2002 – and almost half the 2005 price – on the back of falling domestic consumption in the main European producing countries because of the economic crisis and the availability of cheaper alternatives. The drop in demand has also coincided with a bumper olive crop in Spain, the biggest grower, and the resulting glut has forced the EU to intervene to reduce the surplus amid worries about rural incomes.

Prices for extra virgin olive oil have dropped by 12% year-on-year in Spain, 5% in Greece and 38% in Italy, data from the International Olive Council shows.

The trade body's latest market report also said: "Imports into Australia and Canada fell by 5% and 20% respectively. This is particularly worrying because this downward movement has been happening for three months in a row ... When set against the data for the first four months of 2010/11, the October 2011–January 2012 figures show an 18% decrease in extra-EU imports, which comes as no surprise given the volume of EU production this season, and a drop of 3% in intra-EU imports".

On the positive side, imports are up in China (+25%), Russia (16%), Japan (13%) and Brazil (7%).

More on this story

More on this story

  • Pass notes No 3,183: Olive oil

  • Extra Virginity: The Sublime and Scandalous World of Olive Oil by Tom Mueller – review

  • Olive oil food fraud: pressing truths

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