Olive Oil Market Digest w2

Weekly Olive Oil Market Updates

Market Updates in Europe

As the holiday season concludes, market activity is picking up. Remarkably, demand on Wikifarmer's marketplace remained steady throughout the holidays, reflecting resilience in buyer interest. Following the sharp downward trends observed in recent weeks, a general market recovery is underway. To provide clearer insights into these developments, we have compiled feedback from our commercial team and pricing data from our Price Insights tool.

Farmers continue liquidating their stocks weekly with not too much urgency, and prices in Spain stabilize at around €4.60/kg. However, there is ongoing debate regarding the campaign’s actual yields. Current estimates suggest an oil extraction rate of 16-17% from harvested olives, though the total volume of harvested olives has significantly increased this year. Stakeholders should monitor these yield debates closely, as they could impact both short-term pricing and long-term planning.

Quality remains a key concern. Adverse summer weather conditions and autumn-winter frosts severely affected the sensory and chemical profile of olive oil. Moreover, it is important to consider that most of the olive oil produced at the beginning of the campaign has already been packaged. However, the availability of high-quality extra virgin olive oil offers producers and exporters the opportunity to target premium markets. Packers and distributors may find this an ideal time to capitalize on the global demand for high-quality olive oil.

Market dynamics are further complicated by diverging strategies among stakeholders. Packing houses push for lower prices, while producers are steadfast in seeking more favorable returns. Skepticism prevails among packers regarding new contracts, with purchasing activity limited to replenishing immediate needs rather than speculative buying. This cautious approach underscores the importance of maintaining strong communication channels between suppliers and buyers to avoid prolonged market stagnation.

In Italy, prices remain significantly higher than in other Mediterranean markets, consistently exceeding €9/kg. Italian buyers continue sourcing from Spain, attracted by the comparatively lower prices, which are still more competitive than those in Greece. Producers in Spain may find opportunities to expand exports to Italy while maintaining competitiveness against other suppliers. Although the situation seems to be changing with Greece becoming more and more attractive in terms of quality and speed of delivery. 

Meanwhile, in Tunisia, producers, who had started to sell more aggressively, creating turbulence in the market, increased their economic demands. In spite of this, Tunisia and Turkey are under special control as they are no strangers to potentially dangerous downward price plays. Packers and wholesalers should remain vigilant and flexible as these developments could present challenges and opportunities depending on their sourcing strategies.

In Greece, the prices offered to producers by mills are significantly lower than what producers consider acceptable. As a result, many hold onto their olive oil and store it either at home or in mills. Despite these challenges, the quality of this season's fresh olive oil has exceeded expectations. Notably, it is currently challenging to find Virgin olive oil, as there is a substantial supply of Extra Virgin olive oil with a maximum acidity of 0.5%. This abundance of premium-quality oil could help Greek producers position themselves as key players in the high-end market.

Looking ahead, the olive oil market remains dynamic and complex, with multiple factors influencing both pricing and quality. Collaboration between producers, mills, and buyers will be essential to navigating the current challenges and capitalizing on emerging opportunities. By focusing on quality, adaptability, and proactive engagement, stakeholders can strengthen their positions in an increasingly competitive global market.

Powerful solutions for you

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