Weekly Olive Oil Market Updates
Across the Mediterranean basin, there is a general trend of slight price increases. This week, our field experts have provided valuable insights into Mediterranean movements, complemented by data from organizations such as the Union of Olive Oil-Producing Municipalities of Crete, PoolRed, and Ismea Mercati. Furthermore, transactions on the Wikifarmer Marketplace offer valuable information to supplement our understanding.
Following recent developments in the Spanish market, both supply and demand have solidified their positions, resulting in upward pressure on prices. Packers are not anticipating further price decreases, particularly as Extra Virgin Olive Oil (EVOO) becomes increasingly scarce and prices continue to rise. Companies actively seek to procure as much EVOO as possible due to its limited availability, leading to growing concerns about securing high-quality products.
Attention is currently focused on the upcoming release of the AICA report on May 10th, which is expected to provide crucial insights, especially regarding this month's consumption rates. Rumors are circulating about potential turbulence in the market, particularly since last month's consumption reportedly declined compared to the previous three months, leaving stakeholders speculating whether this drop can be attributed to lag stemming from the Easter holidays. However, there are expectations among many that the forthcoming report will reveal a higher consumption volume for this month. Nonetheless, there is a growing realization of the imminent risk of an EVOO shortage, viewed as a serious and tangible concern within the industry.
In Italy, this year's olive crop has been disappointing, leading to uncertainty and minimal transactions in the market. Despite this, there is optimism surrounding the upcoming campaign in the Mediterranean basin. Despite the awareness of reduced oil stocks, buyers are still purchasing the remaining available stocks. Last week, Greek Olive oil was scarcely available for less than 8 euros per kilo and only in small quantities, indicating a severe supply shortage. In Greece, transactions have slowed down recently, possibly due to the Orthodox Easter celebrations or suppliers' anticipation of further price increases, considering the limited availability of olive oil. Prices have remained stable, but purchasing below 8 euros per kilo has become practically impossible.
Looking ahead, next week's digest will offer a more comprehensive view of the European Olive Oil Market, including reports from the Spanish, Italian, and Greek governments.
Slight Recovery for European Olive Oil Production
Despite this production uptick, the overall availability of olive oil is forecasted to be the lowest in recent years, estimated at 1.9 million tons. This shortfall is primarily attributed to below-average beginning stocks. Compounding this situation is a decline in demand, both domestically within the EU and globally, driven by consumers opting for cheaper edible oils amidst persistently high prices for olive oil. Notably, producer prices remain significantly elevated, maintaining pressure on demand levels.
Within the EU, olive oil consumption is expected to continue its downward trend, potentially dropping by an additional 3% to historical lows below 1.2 million tons. This reduction is expected to be gradual, as the transmission from elevated producer prices to consumers takes time. Similarly, global demand remains weak, leading to a 14% decline in EU exports, particularly to Asian markets such as China and Japan.
Despite these challenges, EU imports are projected to rise by 20%, fueled by lower domestic availability and higher prices. Traditional partners such as Tunisia and Turkey are expected to supply the majority of these imports, with smaller volumes sourced from more distant origins like Argentina or Chile. Consequently, ending stocks for the 2023/24 period are estimated to reach around 365,000 tons, reflecting the ongoing imbalance between supply and demand in the olive oil market.
Wikifarmer negotiates with several suppliers to secure a steady supply of Olive oil at reasonable prices. Our team can help you with price negotiation, pay with credit terms, and arrange logistics and transportation. We also implement strict Quality Assurance procedures, making sure that producers provide us with all certificates that prove their claims about their products, and that all relevant analyses take place.
Our contribution is not constrained just to the facilitation of value optimization for the various market players. We also invest a lot in making sure that our highly-valued partners, either from the supply or from the demand side, keep up with the latest developments in their fields.
This is why we have created Wikifarmer Academy, in order to offer affordable educational courses to all. The Wikifarmer Academy is an online school that aims to provide complete educational courses that will empower you and help you cultivate more efficiently and sustainably. In case you are interested in learning more, check our new course "Wikifarmer Expert in Sustainable Olive Oil Production, Quality, and Economics" here.