Let’s start at the beginning. I’ll first explain what a commodity is, and how olive oil fits into that. And then… how it doesn’t.
A commodity is a bulk, raw ingredient that is the same no matter where it’s come from. Sugar, wheat and soybean oil are great examples. Across the board, Soybean Oil is Soybean Oil, no matter where it’s come from. Many manufacturers opt not even to put a new Soybean Oil supplier through product testing, because the oil will be the same as what they’re already getting.
Bulk olive oil is produced in large volumes, often from the from the same type of trees (if it’s coming from the same country of origin). Sometimes lower grades like Pure, Refined and Pomace are further refined which removes much of the taste and color profile. Those oils are much more like commodities, the same across the board. So when you look at it that way, olive oil in BULK starts to look more like a standard commodity than at first glance.
A commodity is priced on the current market, and prices are constantly in flux-- down to the minute. In the US, most commodities are actually based off the Chicago Board of Trade, which offers a standard that all suppliers and growers can work from on a daily basis.
Olive oil prices are also in constant flux-- but not to the same extreme as most typical commodities. The international commodity market changes on a daily basis. Sometimes prices can be held for a couple days as you’re comparing quotes, but sometimes not-- it depends on what the market looks like at that moment. So while the fluctuations aren’t so extreme, they definitely are there.
If you’re interested in looking at the changes in the commodity market, we recommend looking at our new commodity market tracking tool, which reviews past trends. It will give you a good idea of where the market is in comparison to months or years past. Or if you want up to date information, it’s best to ask your supplier about what’s going on in the market right now and how it will affect you.
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