Erratic Weather in Mediterranean & Increasing Demand in China: Olive Oil Prices Reach New High
In 2014, the muggy weather brought Mediterranean countries including Spain, Italy and France the fruit flies and bacteria that caused severe damages in olive oil production. A lot of manufacturers not only earn less but also had to loan money to produce next year stock.
"Olive oil is expensive and very much in the hands of nature," said Celebrity Chef Jamie Oliver in Bloomberg post. "The really good stuff is worth every penny. You pretty much charge the oil per tablespoon, like you would foie gras or caviar."
Unfortunately after a short recovery in 2015, bad weather hit them again. The continuous unstable weather in the past few years had already lowered the global olive oil production by 8% this season.
"Consumers have every reason to worry the drop in Quantity equate to the drop in Quality." Enjoi Ltd.
Images from Bloomberg
The fact is the reduced harvest can only produce fewer extra virgin olive oil, in order to maintain the supply, manufacturers have to clear all their stored stock. If the stock still cannot keep up with the demand, prices will definitely rises but fraudulent oils are also more likely to be found.
Growing Demand of Olive Oil in China
Images from the Olive Oil Times
With the rapid growth of economy in past decades, Chinese are paying much more attention into the quality of food. Olive oil, known as the healthiest edible oil, its market is filled the fierce competition.
Olive oil particularly the extra virgin olive oil has become the choice of gift amongst Chinese families, it is healthier than wine and it can also be used for cosmetics. The reduced price gap between tradition oils such as peanut oil make incorporating this healthiest oil into the diet more feasible.
The gutter oil incident in 2010 and 2014 and the increasing import of olive oil from not only the Mediterranean countries but also Australia that has rather stable weather and produce premium quality olive oil encourage consumers to look for a reliable brand.
Similarly, oil companies are building up their images through social network and e-commerce to meet up with information channel and purchasing habit of new generation.