Grocery prices in Canada: Why is olive oil so expensive and will better crops mean lower prices soon?
Grocery shoppers in Canada are wondering if the climate change-related olive oil shortage is the reason for increased price hikes on the product
Grocery shoppers in Canada are wondering if the climate change-related olive oil shortage is the reason for increased price hikes on the product, and when or if it will stop impacting prices.
On the Reddit forum Loblaws Is Out Of Control, users have been posting the prices of different containers of olive oil. In one post titled "100% No Thanks," user No-Energy-9016 posted a photo of a three-litre container of No Name 100% extra virgin olive oil with a $58.99 price tag. Another user posted a photo of the same container going for $45.99.
In another post, user meeeechelle remembered a much lower price on the product.
“I couldn't believe the PC brand of olive oil at Superstore was selling for $17.99 the other day,” they wrote. “I've never paid more than $10.99 for it.”
Expert: Droughts impacted crops in Europe
The high prices of olive oil can be traced to the droughts last summer in Europe, which impacted the harvest of olives in places which are major exporters of the product, like Portugal, Greece and Spain.
Mustafa Koc is the director of the Centre for Studies in Food Security with Toronto Metropolitan University. He says that most commodity prices are shaped by availability, but this is not always dependent on natural conditions.
In the case of olive oil, climate change is a factor, along with regular year-to-year variations depending on weather conditions. Koc says supply may also be affected by speculations, stocking and trading patterns.
“Many countries purchase olive oil from countries with cheaper processes, bottle them in their own country, and sell them with their branding at a premium price,” he says.
He adds that in many parts of the world, olive trees are destroyed for political reasons — like in Palestine and Syria — or land speculation for mining activities, like in Turkey.
According to a report by American Near East Refugee Aid, a non-governmental organization that supplies humanitarian and development aid to the Middle East, the ongoing war in Gaza has turned the region's olive groves into "danger zones," depriving families of their primary source of income and destroying lands.
Koc says that while prices for olive oil are likely to remain high due to poor weather conditions, market conditions tend to play a stabilizing role.
“Even if one country has a bumper harvest and is willing to sell at a lower price, it can be harder to expect this to impact global consumer prices as competitors purchase cheaper olive oil at bargain prices, rebottle and sell them at a premium price as long as the current actors remain the same,” he says.
According to the Observatory of Economic Complexity, Canada imported $224 million in pure olive oil in 2021. It primarily imported the product from Italy, Spain, Tunisia, the U.S. and Greece.
"Even if one country has a bumper harvest and is willing to sell at a lower price, it can be harder to expect this to impact global consumer prices."
Canada reacts: 'I'm not putting canola on my garlic pasta'
Many in the over 100 comments of the Reddit post remarked how expensive olive oil was at many grocery stores.
"(Loblaws is) really not more expensive than other places for olive oil," GorzekTheGreat wrote. "Just picked up a litre at Walmart for way more than I was comfortable paying, but I'm not putting canola on my garlic pasta."
Others wondered if prices would go down if future harvests produced more oil.
“Sure, the prices go up this year because the harvest was bad, but next year, if the harvest is good, do you think the prices will come down,” MapleTheUnicorn asked.
Future crops are weather-dependent
As for the immediate future of olive oil supply and prices, it will largely depend on weather.
Certified Origins is a global group of food producers from the Mediterranean area. According to their January market report, the International Olive Council is currently exploring how different genetic varieties of olive can better prepare for unpredictable weather conditions.
However, we’ll have to wait until the spring when the blooms from the Mediterranean olive trees give the first inkling into this year’s potential crops, and if they could help relieve some stress on the market.
