Olive oil is an integral part of the Mediterranean cuisine after bread and wine. With a high smoking point at 195-240 degrees Celsius and antioxidants, it is a healthy oil to cook in. Olive oil is also popular as a salad dressing due to its unique flavor and it most definitely improves the palatability of a salad. Apart from cooking, olive oil can also be found in soaps, cosmetics, pharmaceuticals, and as fuel for traditional lamps.

Due to its uncountable uses, you would think olive oil would come in cheap!

However, that is far from the truth. Olive oil is among one of the least consumed novelties in the vegetable oil world. The reason: high price!

What makes olive oil, at least the truest of it, so rare and costly?

Olive oil is more expensive than other types of oil such as vegetable oil, soyabean oil, and canola oil with prices for 500ml starting below $10 for virgin olive oil to $50 for a high-quality extra virgin olive oil and even going in the three digits for craft single varieties oils. Why is this the case?

What is Olive Oil

Olive oil is obtained from olives, which are the fruits of the olive tree that is cultivated in regions with Mediterranean climates. Most of the world’s olive oil production is around the Mediterranean basin, which consists of countries such as Italy, Spain, Portugal, France, Greece, Tunisia, and Morocco among a few others. The oil is extracted by pressing whole olives and separating the oil from other fruit contents.

Olive oil is produced in the mesocarp cells within the fruit. Each cell contains a tiny droplet of olive oil.

History of Olive Oil: A Strong Reason Why

it’s Pricey!

Evidence from fossils suggests that the olive plant may have originated about 20-40 million years ago in what is now present-day Italy and the eastern Mediterranean basin. The earliest records of olive plant cultivation date back to around 7,000 years ago and it is indicated that olives may have been a source of wealth during the Minoan civilization. So, you see, olive oil has never been a non-pricey thing!

The Greeks used to rub themselves with olive oil while exercising and from around the 7th century BC, the use of olive oil as a cosmetic spread throughout the Mediterranean cities. The Egyptians have been known to import olive oil from Greece, Crete, Syria before 2,000 BC. A major source of Greece’s wealth during the Mycenean period (1450-1150BC) was olive oil exports. It is believed the olives were placed in woven mats and then squeezed. The oil was then collected in stone vats, this process of extraction continued throughout the Bronze age.

Spanish colonists brought olives to the Americas and their cultivation spread across the Pacific coast valleys of South America where the climate is similar to the Mediterranean. Olive oil production has become commercially successful since the 1860s. Today, the Mediterranean region accounts for over 90% of the world’s olive oil production with other parts of the world accounting for about 25% of olive planted area and 10% oil production.

Olive oil press from the biblical era

Olive Oil Uses

90% of all the olives harvested nowadays are turned into oil with only 10% being used as table olives. Olive oil has important culinary uses in Mediterranean cuisine and olives are one of the three staple crops after wheat (used for pasta and bread) and grapes (used as a fruit or for making wine).

Refined olive oil, the most commonly sourced, is usually used for frying and sauteing while the extra virgin variety, the healthiest, is mostly used for salad dressing or is consumed with foods that are to be eaten cold. Olive oil tasting can be like choosing wine as there can be significant variation in flavor depending on the region, ripeness, and age.

The catholic church used to soak olive oil to bless and give strength to those preparing for baptism and the oil has been traditionally used to anoint monarchs during their coronation. Olive oil was the only oil allowed to be used as fuel in the Permanent Temple in Jerusalem. It is also used as fuel for the menorah at Hanukah.

Across Abrahamic religions, olive oil is seen as the oil with purity, so that adds to its value.

Studies have found that olive oil can be used to prevent dermatitis in infants. Due to being rich in antioxidants, olive oil can reduce premature ageing and may also fight off cells that can cause cancer. It also contains Vitamin E which is beneficial for the skin and has been used topically as a treatment for skin conditions such as psoriasis.

Olive oil is a natural lubricant and can be used to lubricate kitchen equipment. It is traditionally used as fuel in oil lamps and used olive oil could be used as biodiesel. Olive oil is used in cosmetics, soaps, and detergents as a base.

Given the fact that olive oil has so many health results, it’s no wonder the demand is more than the supply, which in a simple economy would lead to a higher price.

Extraction of Olive Oil: A Labor-Inducive Process

Part of the reason why olive oil is expensive is in the way it’s made. Olive oil is extracted mechanically or chemically by grinding olives. To produce good quality extra virgin olive oil, extra care must be taken to check that the olives are perfectly ripe because raw olives generally produce oil that is slightly bitter and the oil from overripe olives can taste foul. The process of olive oil extraction is as follows:

  • Olives are crushed into a paste using millstones traditionally, while more modern methods use steel drums to make the paste.
  • The paste is mixed for 20- 45 minutes, this allows the smaller oil droplets to merge with the bigger ones. The mixers are usually horizontal with spiral blades. The paste can be heated, or water can be added to increase yield, but this can lead to lower quality oil. Increasing the mixing duration increases yield but is also conducive to oxidation which decreases the shelf life of the oil.
  • The next step is separating the rest of the olives from the oil. Traditionally this process was carried out with presses called a first press and a cold press, but the more modern method of separation is centrifugation. Some old facilities still used presses for the separation process.

There are two types of centrifuges namely three-phase centrifuges and two-phase centrifuges. Three-phase centrifuges separate all three components i.e., the oil, water, solids. A two-phase centrifuge separates the oil from wet fruit contents. The oil is then stored in tanks where, if needed, a final separation can be done through gravity (as oil is less dense than water) this is called racking. The oil can be filtered for consumption.

Two types of olive oils are directly sold to consumers: virgin olive oil and extra virgin olive oil. Virgin olive oil can be considered regular quality and is usually produced through mechanical processes. Its maximum acidity is two degrees, and this type of oil is mostly used in cooking applications. Extra virgin olive oil is of a higher quality with acidity below 0.8 degrees and a distinct taste. Extra virgin olive oil is used as a dressing for salads, other cold foods or is consumed raw.

We have prepared an article on what makes olive oil virgin, would you like to read? Hit this link!

Virgin olive oil does not usually have the same quality control as the extra virgin variety and is produced keeping high yield as a priority over quality. On the other hand, olives are handpicked for extra virgin olive oil and are perfectly ripened to ensure a uniform flavor. There are several methods to produce extra virgin olive oil with each method affecting the price consumers pay.

Extra-virgin olive oil is unrefined because it does not undergo any chemical processes. It usually has a greenish hue and a slight peppery taste. Since it has not been refined, extra virgin olive oils have a truer olive-like taste, lower oleic acid (fatty acids) compared to other olive oil varieties, and they contain more minerals and vitamins found in olives.

Cold pressing is a common method used to produce high-quality extra virgin olive oils. The olives are crushed into a paste, then the oil is separated mechanically with temperatures not exceeding 27 degrees Celsius. This technique helps the oil retain minerals, vitamins, and other nutrients that break down at higher temperatures.

Why is olive oil expensive?

  • Limitations:

Olives are cultivated in a limited geographic area and the demand for olive oil is high. It is also more difficult to harvest and process olives for oil compared to other oil-producing crops. High-quality oil comes from perfectly ripened olives which are hand selected, this process is much more labor-intensive thus adding to the cost of production.

  • Taxing economy:

As olive oil is produced mainly in the Mediterranean basin, many countries must import the oil. Import tariffs, middlemen, distributor, and retailer markups make olive oil much more expensive than at the point of origin.

  • Lesser Output:

The yield of oil from olives is low with 10 kilograms of olives yielding about 1 kilogram of olive oil. The yield in cold presses is even lower with 1 kilogram of oil needing 15-20 kilograms of fruit. Olive oil production also creates a lot of waste as the leftover olives after oil production cannot be used in any way. The cost of managing and disposing of this waste is another reason why olive oil can be so expensive.

In terms of output, you may be surprised to know how much can palm oil give. Click here to learn more on what makes palm oil so consumable.

  • More of a Physical Job:

Olive farming is labor-intensive because olives grow well in rocky places and most farms are at a gradient along hills with few farms being on the plains. Maneuvering machinery in most farms, therefore, is not possible as the surface is not flat. So, most olives are picked by hand in about 80% of the olive producing regions. The laborious harvesting process adds to the price of olive oil as the price must cover the workers’ wages.

Olive farm in along a hill gradient. This terrain makes farming with machinery difficult.


– Quality Varity:

Another factor that keeps the price of olive high is that olive quality is not standardized and can be haphazard. Olive oil comes in different grades and the best quality oil is produced from perfectly ripe olives. However, olives from each farm have a different hue and taste depending on the region of origin. Many factories source olives from different farms which may lead to the oil tasting slightly off due to the mixing of olives from different farms and ripeness levels.

Extra virgin olive oil made from the olives of a single farm has its own unique taste and colour. These are known as single varietal olive oils and they command a higher price. This can be compared to Single Malt scotch whiskies which are more expensive as they produced in a single distillery in low volume.

  • Shelf Life and Course:

Olives and olive oil have a low shelf life and olives must be crushed within a few hours of harvesting and olive oil starts becoming stale and loses flavour after about one year. This again can result in wastage and unutilized inventory for olive oil producers affecting the price at which the oil is sold.

What Can Be Done To Lower These Prices

Olive oil is expensive when compared to any other type of oil, and this trend will continue due to the production process being laborious, yield being low, and high wastage. The production costs cannot be brought down without a compromise in quality giving olive oil producers two options:

Let farmers process olives from various farms and at different levels of ripeness all in one batch or let them choose just one farm and ripeness level for higher quality. The first option allows for mass-producing olive oil with the producers being able to earn profits from the volumes they sell. This also means that the olive oils may be of varying quality and flavor.

The second option is not conducive for mass production but will produce oil of higher quality. The producers will take a hit in terms of sheer volume but can charge a much higher price per bottle.

Conclusion

For consumers, refined virgin olive is a cheaper alternative to the extra virgin variety. The oil does taste bland comparatively, but it has a high smoking point of around 195-240 degrees Celsius making it ideal for cooking. When frying and cooking hot food the taste of the oil is not usually a point of concern anyway.

Extra virgin oil is expensive with some brands being prohibitively so, but from a consumer’s point of view if the oil is not going to be used in cooking but as a dressing or finishing it does not seem awfully expensive. Let us compare a $25 bottle of good quality extra virgin olive oil to a $25 bottle of wine. The wine bottle will last one meal whereas the olive oil if used as a dressing can last and enhance many meals.

As a consumer, you must know what you’re paying for and one of the ways of doing so is by purchasing directly from the company making the oil. Many brands buy oil in bulk and sell it under their brand name. If a bottle does not feature a farm name it is a red flag where you may be getting a bulk product in an expensive bottle. Passionate olive oil buyers believe in the traceability of the olive oil they are buying and always look for the estate or farm where the oil was produced.