Weekly Olive Oil Market Updates
According to AICA data released last week, olive oil consumption has not significantly dropped, though the remaining EVOO is of lower quality with diminished organoleptic properties. The market is divided, with some companies well-stocked until the next harvest while others are less secure. Leading players in the Spanish market are staying calm and avoiding rushed transactions. The market now reflects a split between high-quality EVOO with higher prices and lower-quality oil at cheaper rates. Despite an uptick in trading activity, consumer purchases fell by 22% in volume in the second quarter of 2024 due to high prices.
The upcoming season's olive oil is expected to be expensive once it hits the market, but experts believe a clearer picture will emerge by November. The prices remain high in Italy, with minimal volumes of Italian olive oil. They might drop a little bit after the production of the new olive oil. However, the estimate is short, which means that Italian olive oil will remain pricier than Spanish olive oil, as in the previous season.
Meanwhile, the situation in Greece remains stable, as producers hold out for price increases before selling their leftover oil. However, the arrival of the new crop, which is expected to be priced higher, may disrupt the market. Currently, a few high-quality EVOOs are left, priced between €7.10 and €8.00/kg. Favorable weather conditions, particularly rainfall since September, have boosted confidence among producers, though the combination of mild temperatures and high humidity raises concerns about potential pest infections.
Union of Small Farmers and Ranchers of Málaga has confirmed a drastic drop in olive production, estimating a reduction of up to 85% compared to last year, particularly affecting the DOP Olives Aloreña de Málaga. This decline is attributed to the ongoing drought, which has persisted for three years, especially in the Guadalhorce region, where some areas may see only 15% of last year's production.
Despite the reduction, the olives are larger and of excellent quality, thanks to favorable temperatures that have mitigated pest damage. However, the situation is particularly dire for dryland olive groves, where production has almost been lost. The unique harvesting method of the Aloreña olive, known as "ordeño" (manual harvesting), is labor-intensive and cannot be mechanized due to the landscape. This makes production costs higher, and with reduced yields, many families face significant income losses.
Union of Small Farmers and Ranchers of Málaga Málaga is calling for direct aid to olive producers and a price differentiation to reflect the unique characteristics and high quality of the Aloreña olive, which is increasingly valued by consumers and has received Protected Designation of Origin (DOP) status.
Export restrictions for Turkey have been lifted
The Turkish olive oil sector has seen a major shift with the early lifting of export restrictions initially set for 2024, after the government plan to boost sales through small packaging. The restrictions, including a 50,000 mt quota and subsidy cuts, led to lower sales and financial strain for producers. Now, with global olive oil production expected to nearly double, and Turkey projected to produce 400,000 mt plus carry-over stocks, market players are aiming to capitalize on increased exports. Prices have already dropped, and Turkey is focusing on new markets like the USA, Australia, and Japan to recover its competitive position.