Olive Oil Market Digest w51

Weekly Olive Oil Market Updates

The olive oil market in the Mediterranean is currently experiencing a complex phase marked by varying dynamics in major producing countries. This week's report compiles expert insights and pricing data from our “Price Insights” tool, focusing on B2B eCommerce in the agri-food sector.

Market Updates in Europe

In Spain, the bulk olive oil market is turbulent, with limited production and weak purchasing activity. Transactions are occurring at prices between €3.8-4/kg, though quality is subpar. High-quality olive oil suppliers are resisting prices below €4.5/kg. As the holiday season approaches, buyers are limited to immediate transactions due to transportation constraints, purchasing only what can be quickly loaded. Overall, the market remains weak, with prices declining and production not yet peaking.

Conversely, Greece's market shows stability, with suppliers holding out for better prices. Fresh extra virgin olive oil availability is low, and prices are higher than in Spain, with Crete offering oil at €5.20 and Lakonia at €6.12. Some transactions are anticipated in the coming week as suppliers aim to secure sales before the holidays. Despite the price disparity, Greek companies continue to source from local suppliers to bolster the domestic market.

Italy faces a challenging olive oil season, with production plummeting to just 200,000 tons, necessitating imports for up to 75% of its olive oil needs. Prices for bulk olive oil in Italy exceed €9/kg, significantly higher than in Greece and Spain. Meanwhile, Tunisia is aggressively capturing market share with lower prices.

Olive oil production at stake

European Commission's forecast is that olive oil production and consumption in the EU are expected to remain flat or experience slight declines over the next ten years. The forecast points to climate change as a major factor limiting yield growth, with water availability and soil productivity negatively impacted. These changes are leading to a shift in agro-climatic zones, which is altering cropping patterns, including olive oil production. As a result, agricultural production is expected to slow, and demand for commodities like olive oil will decline.

From 2010 to 2024, olive oil consumption in major EU-producing countries like Spain, Italy, and Greece has seen a steady decline. The EU consumed 1.79 million tons of olive oil in 2010, which dropped to 1.23 million tons in 2022 and is projected to remain at similar levels through 2035. Specifically, olive oil consumption in Spain, Italy, and Greece is expected to decline by 3% per year. However, in Portugal, both consumption and availability are forecasted to increase.

On the production side, the report highlights a reduction in olive orchards in Italy and Greece, which will further diminish production over the next decade. The future profitability of the olive oil sector will depend on the successful transformation of production systems, shifting from extensive orchards to intensive, highly mechanized plantations. Investments in Spain and Portugal are expected to boost production, with average annual growth projected at 1.2% in Spain and 1% in Portugal.

Wikifarmer is dedicated to enhancing the olive oil sector, which is deeply rooted in the organization’s origins. By providing educational resources and data-driven insights, we aim to establish a secure and transparent system, enhancing profitability across the food supply chain.

Powerful solutions for you

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