The price of premium-quality extra virgin olive oil in the wholesale market fell this month to $2,900 a tonne, the lowest since 2002 and down more than half from nearly $6,000 a tonne in 2005, according to the International Monetary Fund.
This is in part a supply-side phenomenon as Spain seems to have had a bumper crop of olives. But what you’re largely seeing is depressed domestic demand in Mediterannean countries as households downshift to cheaper vegetable oils. That’s the prudent thing to do when there’s double-digit unemployment, falling retirement benefits, and higher prices. But since these are also the oil-producing countries, it’s leading to a glut and a crash.