Geopolitics of olive oil

The olive tree is a symbol of peace. Its cultivation makes it possible to produce an oil highly prized by consumers eager for flavour and attentive to their health. Yet behind this growing popularity lie complex issues, which it seems useful to reveal in order to shed light on an agricultural and food geopolitics with a thousand flavours. We will do so through the prism of the Mediterranean, climate and quality.

Around the Great Blue, a belt of olive trees

Geographers, following Fernand Braudel, tend to trace the outline of the Mediterranean space by following the lines of olive groves. It is true that the tree has embodied this region for a very long time. For olive oil, it is by far the dominant area of expression: nearly 95% of global production takes place there. Few food products are so strongly localised and so deeply integrated into a way of life in which gastronomy and cultural heritage come together. In 2010, UNESCO inscribed the Mediterranean diet on the Intangible Cultural Heritage of Humanity list, notably establishing olive oil as one of its key characteristics. Observing the olive oil market therefore means travelling along these Mediterranean shores where, almost everywhere, fields of olive trees stretch across hillsides or plains. Let us not dwell further on the richness of this geohistory, but set out the contemporary situation[1].

Spain now holds, by far, first place worldwide and therefore in the Mediterranean. With 1.4 million tonnes (Mt), the country alone accounts for up to 40% of olive oil production in certain years, exporting half of its harvest, which also makes it the world’s leading exporter. Some 2.7 million hectares are devoted to olive groves, equivalent to 10% of the total agricultural area currently used in Spain, which has invested massively in olive growing over the past three decades, with Andalusia leading the way. Nearly 80% of Spanish production comes from this region. With its 60 million trees, it is more specifically the province of Jaén that drives the Andalusian dynamic, with 20% of the world’s oil originating there. Among Spanish operators in the sector, the company Deoleo leads the field, positioning its brands in more than 60 destinations across the globe, including Bertolli and Carapelli, despite their Italian-sounding names…

Next, within this Mediterranean landscape, we find two categories of countries.

• First, those that matter in the olive oil market, namely Turkey (0.5 Mt), Tunisia (0.35 Mt), Greece and Italy (0.25 Mt), Portugal and Morocco (0.2 Mt). Three points should be made here: Turkey is gaining strength, but also benefits from flows from its Syrian neighbour, which lacks appropriate industrial tools; Tunisia is the leader in organic olive oil production; Italy buys a great deal of Spanish oil in bulk, but bottles it on its own soil and thus makes up for its national supply deficit.

• Second, the rest of the Mediterranean countries where the olive tree is present, but where olive oil production remains artisanal, limited in volume, even though consumption is significant. The best example is France, where the tree is mainly found in the PACA region, but where 95% of national needs are covered by imports. France produces only 4,000 tonnes of olive oil per year, but consumes nearly 150,000! Since the beginning of this century, demand has increased by 30% in this specific market. As a result, every year, France buys between 600 and 800 million euros’ worth of olive oils abroad, Spain being its leading supplier[2].

While the Mediterranean concentrates power and attention when it comes to olive oils, this should not make us forget that the United States has become the world’s leading importing country and also one of the foremost consumers. When Donald Trump taxes European agricultural production, he increases the price of a bottle of olive oil on his own territory, where his administration has nevertheless been seeking to develop a new nutrition policy for the past year… Another trend to watch is Brazil, where imports and consumption are also increasing. Canada and Japan have also become significant buyers on the global market. That market is nevertheless worth 20 billion euros every year. And global consumption of olive oils has risen by 50% since the early 2000s[3], although it remains geographically concentrated.

Olive oil, a climate barometer

Where there is the Mediterranean, there is a double adversity: geopolitical and climatic. Let us move quickly through the first determining factor, since there is no need to insist on the fact that this region constitutes one of the hotbeds of global strategic and structural tensions. Let us simply specify that, as a consequence, in this space where rivalries unfortunately prevail over neighbourly solidarities, olive oil is hit hard by the torments of a faltering regional vision. We cannot truly say that the Mediterranean is an olive-growing power, beyond the facts and figures presented above. Each country competes with the others, and no industrial champion has sought to take up the banner of the Mediterranean in order to assert itself economically. The marketing potential of the Mediterranean diet is exploited more than the idea of building a genuine regional umbrella brand with global resonance. Some may perhaps say that the olive tree, as a tree, is enough in itself… Yet it is the highly symbolic antithesis of a semi-tragic Mediterranean, in which conflicts, tragedies and divisions have worsened in recent years.

On the climate front, is the picture any better? Not really, even though we could note that scientific and technical cooperation between Mediterranean countries is enabling innovation and seeking to adapt olive cultivation to meteorological changes. But the realities are before our eyes: droughts are more frequent, more severe and longer, water stress is advancing around the Mediterranean rim, while bioaggressions threaten olive groves, such as Xylella fastidiosa, which has been ravaging the fields of Apulia in southern Italy for a decade. The olive tree does not require large quantities of water. But if it is deprived of it for too long, this does not prove favourable to its yield. Moreover, yields are stagnating in many Mediterranean countries, including Spain. It is indeed the increase in surface areas and reforestation through olive trees that has increased production volumes. But irrigation already also counts in the result. One third of Spain’s olive groves depend on it. It should be said that in 2022 and 2023, the country was struck by the worst drought in half a century, causing harvests to collapse. Olive oil production then fell to 0.7 Mt and then 0.8 Mt. These were two years in which the global market suddenly tightened, since Spain quite literally makes the weather in this market. This generated strong inflation in the price of olive oil, of around 50% on average within the European Union (EU) between January 2023 and January 2024[4].

While we must question the sustainability of intensive olive-growing models tomorrow in a water-poor space and under climatic conditions set to become harsher, we must also consider the price of this olive oil. Two things should be noted: Spain currently sets prices in view of its weight, but also because of Poolred, a composite indicator based on bulk transactions, although this covers only one third of the Spanish harvest and yet alone sets the global reference price; could the desalination of seawater (the Mediterranean in this case) contribute even more to the irrigation of olive groves in the future, but at what cost? For consumers, it is important to understand this intimate interaction between climate, production and the price of this olive oil, which is anything but a mass commodity. These elements give this product a singular dimension. Unlike other vegetable oils produced on several continents, the global olive oil market depends very largely on the agricultural and climatic balances of a relatively restricted space. A drought in Andalusia, a phytosanitary crisis in southern Italy or excessively mild winters in North Africa can quickly affect available volumes and international prices[5]. More broadly, the future of olive oil will condition that of Mediterranean rural territories where this crop shapes landscapes and sustains the incomes of agricultural areas generally confronted with sociopolitical marginalisation and the first victims of climatic constraints.

Quality, a difference to be paid for

Although marginal in volume at the global level, olive oil remains a product extremely sensitive to environmental and political developments in the Mediterranean. Indeed, within the major global agricultural balances, olive oil is a niche product! With production of around 3 million tonnes (Mt) per year, it weighs little compared with other vegetable oils that flood the world’s kitchens, such as palm oil (80 Mt), soya (60 Mt) or sunflower oil (25 Mt). Put differently, olive oil accounts for barely 2% of this market for edible oils… The strategic specificity of olive oil does not lie only in its geography. It also lies in the very nature of this market, which rests less on volumes than on quality. Olive oil therefore plays its game on this field of quality, which is also highlighted in relation to consumer health. As we have said, olive oil lies at the heart of the narrative of this Mediterranean diet, so often presented as one of the most sustainable models in terms of social, ecological and health development. The risk of dying from cardiovascular disease is said to be twice as low among people consuming one teaspoon of extra virgin olive oil every day[6].

Quality is also essential in price formation, since a quality premium is incorporated into Poolred’s basic reference price. And here again, the weather is key to the quality of olive oil. This is where it is also necessary to shed light on olive oil classifications. Unlike the major industrial vegetable oils, olive oil comes in several quality categories. So-called extra virgin oils represent the highest level: they are obtained solely by mechanical processes, without refining, and must meet strict chemical and sensory criteria. Virgin oils present slightly lower qualities, but remain consumable as they are. Finally, so-called lampante oils (around 1 Mt all the same!) cannot be consumed directly and must be refined before being marketed. This quality hierarchy profoundly structures the economy of the sector. Value is concentrated mainly in extra virgin oils, which benefit from strong gastronomic and nutritional recognition. International competition therefore largely concerns producers’ ability to improve their standards, guarantee traceability and enhance the value of their terroirs.

Like wine, olive oil is the only product whose quality is analysed and tasted through objective physico-chemical criteria and an official panel test. This sensory analysis is standardised and carried out by the International Olive Council (IOC), based in Madrid. Unlike wine, however, olive oil is consumed in the months following bottling, there is no improvement with time and it is therefore pointless to want to hoard one’s stock… It should be noted that olive oil can lose some of its qualities if the various logistical stages, between the press and the kitchen, are poorly controlled. Proper storage is crucial, as is the oil’s container, hence the use of glass bottles that are usually not very transparent in order to avoid qualitative degradation of the product. This chain of performances that must constantly be guaranteed also explains the price of this fragile oil. This economy of quality is also accompanied by a growing issue: authenticity. The high value of olive oil, particularly in its premium categories, exposes the sector to risks of fraud and adulteration. In several investigations conducted over recent decades, cases have been identified in which lower-quality oils, or even other vegetable oils, were mixed and then sold as extra virgin olive oil. In other situations, the geographical origin of products was falsified in order to benefit from the reputation of certain Mediterranean regions… These practices have led international and European institutions to strengthen control and certification mechanisms. The olive oil sector is now investing in more sophisticated chemical analyses as well as in digital traceability systems. In this battle for trust, standards become a genuine instrument of economic power. Yet here again, all these additional performances to be achieved gradually weigh on the formation of the price of an olive oil whose future accessibility, as we have already said, will be increasingly shaped by climate.

Prospective reflections

This overview leads us to raise two major global questions.

• The first concerns the possibility of seeing olive oil leave its Mediterranean geohistorical basin and gain new productive territories in the coming years. California, Chile, Argentina and Australia have been attempting this gamble for some time, without major results, in any case without disturbing Mediterranean dominance. What of China, which appears to be embarking on this path and which often does nothing by halves? What of Pakistan, another little-known agricultural giant, which is also displaying ambitions in this area? The olive tree has a remarkable capacity to adapt to arid environments. But this resilience has its limits. Extreme climatic events disrupt its flowering cycles, reduce yields and alter the quality of olives. In the case of France, it may be that olive groves will appear tomorrow where vines retreat, particularly in the South-West. It remains to be seen whether the Mediterranean countries will not want to retain control over this strategic production by succeeding tomorrow in working more closely together and uniting in this shared agricultural and cultural defence…

• The second global reflection, even though new, more resistant varieties of olive tree are being developed, raises the following question: are we moving towards an increasingly luxury market for olive oil? Already, its price is an obstacle for many consumers, including in countries where this product is nevertheless known and renowned (one need only observe the case of France). Globally, palm and sunflower oil dominate kitchens, with Indonesian and Ukrainian origins leading the table. For olive oil, between growing imbalances between supply and demand, climatic variations and price volatility, we could see, much more sharply than today, an entry-level category, but already costly, and a high-end class for exceptional oils. Health and authenticity will be safe values in the world of tomorrow.

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[1] The data in this article are mainly drawn from the International Olive Council (IOC). 

[2] Data from French Customs.

[3] Data from the International Olive Council (IOC); global consumption was 2 Mt per year in the early 2000s; it now reaches 3.2 Mt.

[4] Eurostat data.

[5] When discussing the price of olive oil, it should be borne in mind that, in the case of France for example, there are three building blocks to distinguish: first, the origin price, at the mill gate, based on the reference indicator known as Poolred (a Spanish system managed by the Fundación del Olivar), then the net prices charged by marketers (industrial operators and packagers) to purchasing centres and distributors, and finally shelf prices in shops, or consumer selling prices, set by distributors.

[6] lynn, M. M., Tierney, A., & Itsiopoulos, C. “Is Extra Virgin Olive Oil the Critical Ingredient Driving the Health Benefits of a Mediterranean Diet? A Narrative Review”, Nutrients, 15(13), 2916, (2023).