If you use olive oil ‘the Greek way’ in abundance and directly from the source, you must have felt the pinch of prices rising throughout 2023, particularly in the last few months.

It’s not just Greece raising the price bar on its liquid gold. Imported olive oil from Spain, Italy and elsewhere has hit record prices this year following extreme weather events that devastated harvests and led to market-wide shortages affecting consumers globally.

Australians are no exception

The cost has always varied depending on your choice of product. Australian or imported, extra virgin and organic or lower quality at a competitive price, going for the supermarket brand or shopping for European high-end produce.

However, recent developments have affected the cooking staple across the board. Jim Katsaros, a shop owner in Melbourne’s Preston Market, says retailers have witnessed consistently steep increases in the cost of imported olive oil from Europe, including Greece.

“Four months ago, I had beautiful olive oil from Crete at $36 – $40. Average sales are now within the $60 mark. And I know many places that have increased it to $70.

“What’s been happening in the last six months is with every fresh delivery that comes through, there’s an increase of as much as $10.

So, you’re not looking at your usual dollar or two,” Katsaros tells Neos Kosmos.

Export prices uphill

Adelaide-based wholesaler Arthur Kontopoulos placed the export prices uphill last June, with the export price from Greece gradually rising from €5 ($AUD 8.33) per litre to €9 ($AUD 14.99).

“Let’s say, for example, olive oil sold at an €8.50 ($AUD 14.15) export price in Greece will reach wholesalers here following transport and other costs at $14.97 per litre.”

Retailers can hardly make a profit on olive oil, he says.

“We are seeing shops selling at around $70 per 4 litres. With this price, they’re even selling at a loss.”

According to Kontopoulos, consumers turned to Australian olive oil when this year’s harvest came out fresh at slightly smaller prices than imported ones.

“This was around the June to August trimester. But Australia produces at most 150,000 tonnes of olive oil fruit. This is enough to address local demand for over three months.”

While the Australian olive harvest is not officially tracked, industry estimates from the Australian Olive Oil Association (AOAA) posit the 2023 harvest of 18-19 million litres of oil from approximately 110,000- 120,000 tonnes of fruit.

“Early in the season, the industry was poised for a promising harvest, but cold weather and rain in May and June, particularly in southeast Australia, had an impact.”

Drought and climate change impacts

President of the AOAA, David Valmorbida, commented in a statement provided to Neos Kosmos on this year’s “lower than average” oil yield even in Australia.

Citing a “global olive oil shortage of 35-40 per cent” due to climatic conditions, with the highlight being the Southern Spain drought over an extended period, the Association says, “some larger Australian growers are in a good position to export olive oil to Europe”.

Kontopoulos also points to Spain’s reduced production as the primary driver of rising prices.

“And I don’t think they’re returning to what they were. Spanish harvests have been devastated, like Morocco and Southern Italy, and Greece has merely 60 per cent production of its normal capacity this year.”

The wholesaler believes that prices should not resume to previous levels even after production levels recover in Greece.

“People should know that the price of olive oil was problematic for the producer. There was a point where Coca-Cola was more expensive than olive oil. That’s not OK.

“The export price should not go below €5.50 ($AUD 9.15). Anything below that is unsustainable for growers.”

Messinian producer Kostas Tsaltas speaks of a “price normalising” that resulted from the impact on Spanish production.

“Being the largest producer in the market, Spain sets the prices.

“Forget about Greece or Italy; Spaniards have endured the biggest devastation over the last two to three years, not just in terms of losing fruit, they’re faced with potentially losing trees [because of the drought].”

Tsaltas tells Neos Kosmos that the industry status quo had Greek producers “selling at humiliating prices” for decades.

“Just think of this. Back in 1980, we were selling for 1,000 drachmas per kilo. That’s the equivalent of €3 ($AUD 4.99), which hasn’t changed since the 1980s. Can you imagine?”

Prices reflect reality

Harvesting in Messinia, he says, costs the average producer €1.50 ($AUD 2.50) per kilo, not considering maintenance expenses for groves.

“Selling at €3 ($AUD4.99), they’re left with nothing.

“So, producers are selling at €8 ($AUD 14.15) a kilo; now it’s not an exorbitant price. Rather, prices now are more reflective of the real cost.”

Like many Greek olive grove areas this year, Messinia suffered prolonged heat waves and unusual weather conditions impacting olive trees’ flowering and fruit-setting stages.

Some regions have been hit harder than others.

Valia Kelidou is the Communications Manager of Kyklopas, a family-owned olive mill in Evros, the northern Greece epicentre of the EU’s largest blaze on record in August.

“Conditions have been unfavourable for fruit setting over the past year. There is no rain and not a very cold winter; the climate has changed in ways that don’t help olive trees. But beyond that, we’ve also had catastrophic wildfires this summer. So, some trees have not been bearing fruit, and others have been burnt,” Kelidou said.

Olive groves in Evros, Greece’s closest mainland area to Turkey, account for a small part of the country’s oil production.

“Places down south like Kalamata have millions of trees. Our region has around 200,000. But we have some of the oldest olive groves in the Mediterranean.”

Fires have been devastating for that niche spot of ‘green gold’.

“Around 90,000 trees were affected by the wildfires. Some turned to ashes, and others suffered heat injuries, meaning they wouldn’t produce any fruit for the next three years or ever again. We’ll have to wait and see if they can recover.”

Some full-time growers in Evros who suffered the double blow of extreme weather and wildfires are now considering alternatives, Kelidou says.

“We’re talking people in their 60s who lived off olive oil. They must resort to other jobs to complement income until they see their trees bearing fruit again, which may take years.”

Tsaltas paints a bleak picture for the future of production down south in one of Greece’s leading olive oil-producing regions.

“Olive trees are very weather dependent, and here we are in Kalamata in mid-November with temperatures between 25 and 27°C, at a time of the year when we normally had 10-15°C.”

“Many groves in Messinia are owned by lawyers and doctors who can practically sponsor their groves to keep alive what they inherited from their parents. Full-time growers are the ones struggling for years, and most manage to keep afloat by doing other jobs on the side from agricultural to trades or even hospitality.”

He concludes that consumers in Greece and abroad should be aware of the bigger picture “before rushing to complain about the rising price of olive oil”.