ANOTHER pantry staple set for price rise amid European heatwave
Extreme heat overseas combined with an 'unusually cold' season in Australia has led to reduced supply.
An essential item in many Aussie kitchens is about to be hit with a price hike, experts warn, due to record-breaking heatwaves across Europe.
Holiday spots like Spain, Italy and Greece were hit with temperatures soaring above 40 degrees, with the heat and drought impacting the supply of olives from some of the world’s biggest olive oil producers.
This, coupled with an “unusually cold and short” growing season for Australia’s largest olive oil supplier, could result in a price increase on supermarket shelves.
About half of all olive oil consumed in Australia is imported, Australian Olive Association chief executive Michael Southan told ABC.
"We don't produce enough to meet domestic consumption; we're roughly producing half of what we consume," he said.
"We are seeing world record prices, because of the northern hemisphere drought and there is a shortage of olive oil coming out of the big producing countries.
"[The price] won't be too far out of alignment with what we're seeing across the board.”
In April, olive oil prices were driven to their highest point in 26 years due to drought, specifically in Spain.
The International Monetary Fund revealed the previous record price of US$6,241.91 per metric ton – set in December 1996 – was overshadowed by a new high of US$6,269.63 at the end of April this year.
Australia’s biggest supplier records lower than expected harvest
The nation’s biggest olive oil producer Cobram Estate revealed in their harvest report in July they harvested less product than they anticipated.
Despite expecting to produce between 12.6 million and 13.2 million litres, the company recorded 12.5 million litres.
“The lower than expected crop has been driven by the unusually cold and shorter growing season delivering lower-than-average oil content in the fruit, combined with smaller-than-normal fruit size,” Cobram Estate said in a statement to its shareholders.
They said the quality of the oil was “excellent” and insisted there was enough supply to “meet the requirements of its packaged goods sales plan over the next 12 months”.
Prices of olive oil compared over the years
A quick comparison of olive oil on Australian shelves show some products have risen by more than 70 per cent in less than two years.
In July 2022, Moro Extra Virgin Olive Oil was priced at $36 for 4 litres. In June this year, the same product sold for $48. Now, Woolworths have announced a ‘price drop’ on the item, reducing it to $43 – still an increase of almost 20 per cent on last year.
Woolworths’ own brand of 100% Spanish Extra Virgin olive oil increased by more than 71 per cent between December 2021 and August 23, with a jump from $7 to $12.
While Coles raised the price of their own 500ml extra virgin olive oil by 60 per cent, from $5 to $8.
Interestingly, Cobram Estate olive oils remained at the same price.
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Heatwaves spark warnings of scorching Aussie summer
The heatwave on the other side of the world is not just impacting food prices – there are concerns Australia could face a scorcher of a summer if the weather in the northern hemisphere is replicated south of the equator.
Despite Aussies previously experiencing hot summers, experts say the nation is unprepared for what's to come with many predicting the first El Nino in three years.
Sweltering Cities executive director Emma Bacon said extreme global heatwaves should be a wake-up call for Australia.
"Regardless of whether we have El Nino or not this year, the heat we're going to experience in coming summers will be worse than any we've felt before due to climate change," Ms Bacon said.
"They will be the hottest summers of our lives."
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