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European Olive Oil Market Report - December 2024
Main Market Figures - Spain
As the market enters a period of intense harvesting, stocks of fresh-produced extra virgin olive oil are increasing gradually. The AICA data released this week provide a better view of how the season is progressing in Spain.
Weather Conditions
November brought abundant rainfall, which not only replenished water reservoirs but also supported the health and productivity of olive groves. While the wet conditions may have caused minor delays in harvesting, they positively impacted olive oil yields. The increased water levels provide a promising outlook for better irrigation during the upcoming summer.
In Andalucía, Spain's leading olive oil-producing region, water levels rose by 2.31%, offering a welcome boost to local agriculture.
The current state of water reservoirs in Spain is showcased in detail in the following graph:
Outputs
With the season underway for two months, total production stocks for the 2024-25 crop have reached 292,020 tons, bringing the total available stocks—including the new crop and carryover—to 320,300 tons. Currently, packers are holding 92,500 tons, while farmers retain 227,750 tons.
A slight decline in output has been observed, particularly in the domestic market and exports. In November, output totaled 75,420 tons, reflecting an 11.12% decrease compared to the previous month, when volumes exceeded 80,000 tons.
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Our View
The olive oil in bulk industry is navigating an unprecedented situation this season, creating confusion among stakeholders like never before. While the harvest is progressing as expected and the availability of fresh oil has significantly increased, packers are limiting their purchases to immediate needs. This cautious approach keeps their stocks low and intensifies anxiety among farmers.
Farmers face a lack of medium—and long-term agreements with packers, which is driving increased competition and fueling a price war. Currently, bulk olive oil prices for good quality Extra Virgin Olive oil remain above €4,60/kg. Market prices are expected to hover around €4/kg in the short term, with January likely bringing even lower prices. Despite this volatility, output levels remain steady, with no unexpected surges in consumption.
In Greece, prices remain higher due to harvesting delays, but they are anticipated to align with the Spanish benchmark once the harvest progresses. Tunisia, on the other hand, is expected to be a significant price disruptor in the medium term, as its limited storage capacity could exert downward pressure on global prices.
Meanwhile, the markets for pomace and lampante oils are still tight, with prices closely following the trends of extra virgin olive oil. As the season unfolds, these dynamics will continue shaping the market landscape.
Main Developments in Greece
Greece has yet to fully enter the peak of its olive oil production season, with most olive groves still awaiting harvest due to continuous rainfalls in main producing areas like Kalamata. This delay poses risks, including potential reductions in quality or losses in yield. As the season progresses, Greece may need to adjust its market prices to align with those of other producer countries to remain competitive.
While current market conditions suggest the possibility of a complete drop below €4/kg for extra virgin olive oil price, this could eventually lead to a slight rebound, potentially stabilizing around the €4 mark. Greek producers closely monitor these developments as they prepare to bring their harvest to market.
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