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EUROPEAN OLIVE OIL MARKET REPORT - JANUARY 2025
Main Market Figures - Spain
This month’s AICA data is highly anticipated as the harvest reaches its peak and weather conditions disrupt the crop’s flow. Below is an in-depth analysis of the January report, including expert commentary on the bulk olive oil market.
Weather Conditions
January brought higher-than-expected rainfall, improving irrigation prospects for the summer months. The increased water reserves create a positive outlook for olive grove development. While January is typically a peak harvesting period, persistent rainfall disrupted operations, delaying a significant portion of the harvest. As a result, February is expected to see above-average harvesting volumes.
Moreover, water reservoirs in Andalucía, the leading production area, increased by 12.62%, reaching 38.91% of their capacity. February continues to experience persistent rainfall, leading the market to anticipate further harvesting activity. Traditionally, harvesting is completed in February, but this year's delays may extend the process.
The current state of water reservoirs in Spain is showcased in detail in the following graph:
Outputs
As mentioned in our previous olive oil market update, December saw intense harvesting. However, due to persistent rainfall in January, this trend did not continue. Harvested volumes in January reached 341,490 tons, nearly halving compared to the previous month.
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New production has officially reached 1,234,568 tons, while total stocks now stand at 1,056,559 tons. Specifically, packers hold 176,295 tons, and farmers retain 865,568 tons.
Meanwhile, January outputs increased by 31.92%, reaching 116,159 tons—well above the 100,000-ton threshold. This indicates that despite cautious purchasing activity driven by rainfall and anticipated price reductions, the market remained strong, with both national trading and exports experiencing significant growth.
Our View
The latest data indicates a significant recovery in output levels. Lower retail prices are stimulating consumption, and if this trend continues, the final carryover is expected to be lower than initially projected.
Total production is on track to reach 1.4 million tons, ensuring ample supply for the year ahead. However, stock distribution remains uneven, with farmers holding over 80% of total stocks. Packers have maintained a cautious purchasing approach, acquiring only what is necessary to meet immediate commitments.
The availability of high-quality Extra Virgin Olive Oil (EVOO) in Spain remains limited, increasing demand for Greek EVOO, which continues to command higher prices. Meanwhile, Tunisia is emerging as a key price disruptor in the medium term due to its limited storage capacity, while Turkey also reports strong production figures.
Looking ahead, farmers' willingness to sell will play a crucial role in shaping price movements. However, given the current market fundamentals, there appears to be little room for price declines in the short term.
Main Developments in Greece
In Greece, the market has begun to follow the downward trend of the Spanish market, with prices decreasing slightly but still remaining above Spanish levels. The availability of extra virgin olive oil in olive oil mills remains limited, as suppliers expect prices to rise due to the impact of rainfall on the Spanish and Italian markets.
The overall production maintains good quality, with prices varying across regions. With an average price of €5.20/kg, the national market is seeing some trading activity. However, Italian buyers are showing limited interest, as Greek prices remain higher than Spanish offers. The Greek market is eagerly awaiting AICA data, which is expected to influence commercial activity in the coming weeks.
In conclusion, while weather conditions have disrupted harvesting in key regions, production remains strong, and market fundamentals suggest stable price levels in the short term. The balance between supply, demand, and farmer selling behavior will be key in shaping price movements in the coming months. As the season progresses, we will continue to monitor developments and provide updates on how these trends evolve.
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