Plunging olive oil prices are leaving Middle East farmers struggling, with margins squeezed by the economic woes of heavily indebted Mediterranean countries.
Olive oil prices fell to US$2,921.46 per tonne last month, compared with highs of $5,853.98 per tonne in 2006, according to data from the IMF.
Countries in the Levant, where olives were first cultivated for use in oils, account for more than a quarter of global production and a significant quantity of exports, according to the International Olive Oil Council.
"The impact is worldwide, especially on small farmers," said Nasser Abufarha, the director of Canaan Fair Trade, an association of about 1,700 Palestinian farmers that caters to so-called ethical consumers.
"The only ones who can escape such an impact are those producing specialist, connoisseur-type oils … or those paying a sustainable minimum price."
Olive oil has experienced lower demand from southern European countries that are suffering recessions, such as Portugal, Italy, Greece and Spain. A lack of bank credit in these countries is also forcing farmers to sell at a lower price, creating a glut of olives and further lowering prices.
But a handful of European companies had waited until later in the season to purchase from Middle Eastern olive growers, denying them a major source of income and forcing many to sell at lower prices to make ends meet, Mr Abufarha added.
"Farmers outside of our network are really suffering," he said. "A lot of their harvest is sitting in their homes, normally they should be out of oil by now."
Scarcity of water in the Levant means Middle Eastern olive producers are unable to compete on cost with subsidised European producers in Greece and Spain, said Hanan Samara, a director of Terra Rossa, a family-owned distributor of connoisseur oils based in the United Kingdom.
But Europe's economic stagnation had reduced the number of customers willing to fork out for artesian brands, Ms Samara added.
"People don't want to pay," she said. "People are buying less and less of the quality oils and making do with what they can get from supermarkets."
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