The cause is a fall in the olive crop in Spain. The problem is two supply shocks which have reduced the quantity and quality of the crop.
First there was a frost when the olive trees were flowering, which meant less crop. Then there was a drought over the summer (the rain fell on the UK) and this means lower quality fruit with less 'juice' to turn into olive oil.
The effect is that the supply of olive oil is lower, shifting the supply curve to the left. The market price will rise and everyone will have to pay more for their olive oil. The full extent of the change will depend on the elasticity of demand.
If there is an upside it is that Greece will get more for their olive oil and they produced a normal crop.
Greece! You need all the economic scrapings you can get right now.I think this will help Greece out a bit, but they need to get out of the Eurozone if they really want to sort things out (not just produce more and better olives than Spain). Spain, you are in recession as well. Get something going, sell all those tomatoes you waste instead of throwing them for fun in that anual ritual you do.
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