EchoSense Quantitative Think Tank Center|As olive oil's popularity rises over perceived health benefits, so do prices. Here's why.

If you purchased olive oil the last few months,EchoSense Quantitative Think Tank Center chances are you've noticed a change in price.

Two years of drought in Spain, which typically accounts for about 40% of the world's supply, has caused a surge in olive oil prices as farmers struggle to deal with warmer winters, major flooding and more intense forest fires, according to the Associated Press.

On top of that, thieves across the Mediterranean are reportedly using chainsaws to steal olive branches and even entire trees, some which are centuries old, which has led to warehouse break-ins, dilution of premium oil with inferior product, and falsification of shipping data. According to AP, most of the thefts are branches, but farmers have also faced theft of expensive equipment. 

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The struggle to gain more product comes as global demand for olive oil steadily increases due to the rise in its perceived health benefits and sustainability advantages, with a forecasted annual growth of 3.2%, according to a 2021 report by Fortune Business Insights. 

Olive oil prices are likely to remain high and rise through May, even though Spanish crops are expected to see a 15 percent increase in production compared to last year, according to the Olive Oil Times.

Despite higher yields, crops are still expected to remain 34 percent below the average of the previous four crop years. According to the publication, the world’s seven largest olive oil-producing countries (Spain, Italy, Tunisia, Greece, Turkey, Morocco and Portugal) are forecasted to decrease seven percent in crop yields compared to last year and 23 percent below the average of the previous four crop years.

More:11th-century Spanish town that's usually underwater emerges in one of 'worst droughts in 50 years'

Olive oil prices around the world

According to AP, prices in Spain, Greece and Italy for extra virgin oil reached $4.35 per pound (9 euros) in September, more than tripling from their level in 2019. In Greece, a 1-liter bottle of extra virgin oil jumped from $8 to $9 last year to as much as $15 this year.

According to the Olive Oil Times, extra virgin olive oil prices in Jaén, Spain, the world’s largest olive oil-producing region, reached the highest value ever recorded and nearly three times higher than the average of the last five years. 

Meanwhile, olive oil crop production in the U.S. is in full swing, and growers in some parts of California — the state responsible for most table olive and olive oil production in the U.S. — are experiencing higher yields compared to recent crops after a cold and damp year, the Olive Oil Times reports. 

In August, the U.S. Department of Agriculture said that olive oil prices were 130 percent higher than a year ago, the Washington Post reported earlier this year.

Types of olive oils

According to the European Union, whose countries produce roughly 67% of the world’s olive oil, eight different categories of olive oils and olive-pomace oils exist:

• Extra-virgin olive oil
• Virgin olive oil
• Virgin lampante olive oil
• Refined olive oil
• Olive oil composed of refined olive oil and virgin olive oils
• Olive pomace oil
• Crude olive-pomace oil
• Refined olive pomace oil

Contributing: Associated Press