The surge in olive oil prices, along with fresh produce, is exacerbating already high food prices as the Northern Hemisphere summer starts in less than a month.

Data from Bloomberg shows that Spanish extra-virgin olive oil prices have jumped 200% since 2020 to 5,870 euros per metric ton — the highest level since 2010. Most of the price surge was recorded in the last year.

"Output in the country could more than halve this season due to the arid conditions, according to a Spanish farming industry group," Bloomberg said. Spain accounts for 40% of the world's supply, indicating prices across Europe and other regions are being pushed higher.

Europe's Monitoring Agricultural Resources recently said Spain is under severe weather stress, with barely any rainfall since January. The drought is damaging crops and threatens to drive food prices even higher across Europe.

Research firm Gro Intelligence penned a note last week that warned the country is in "extreme" drought across top croplands — the highest recorded reading in at least two decades — while soil moisture levels are the lowest since at least 2010.

Drought conditions in Spain have been exacerbated by above-average temperatures that could be due to an emerging El Niño weather pattern. We warned this might create disruptions in the agricultural industry.

El Niño comes as global food prices remain at decade highs.

These price levels are dangerous because high inflation can spark social unrest in countries.