With barely one month before the main countries of the Mediterranean basin starts off the harvesting of their olives and the production of early oils, international operators have already drawn up the first estimates of what the next campaign can yield for the 2020/21 campaign.
The most significant data at the level of the Mediterranean basin is that the production of olive oil could be reduced by around 350,000 tons; caused mainly by the expected decline in Tunisia and Italy. However, this reduction will be partially compensated with an additional 150,000 tonnes of the previous campaign stocks in the other Mediterranean countries and with the 450,000 tonnes that will remain in the wineries in Spain at the end of September.
By country, the first assessments suggest that, if the weather does not give us a setback, in Spain we will be able to achieve an olive oil production of the order of 1,65M-1,75M tons, followed by Italy, which will move between the 230,000 and 250,000 tons and from Greece with an estimated volume between 220 / 240,000 tons, compared to 260,000 for the current season. Regarding the rest of the world, Chile, Argentina, the US, Australia, Peru, etc., it is estimated that production could reach around 100,000 tons.
At this point, the estimates of world olive oil production could reach 3.11M tons, to which we would have to add remaining stocks of approximately 900,000 tons, which puts on the table a total availability of about 4M tons of olive oil for end consumption, sustained by International Olive Council data.
And it is at this point where the real dilemma lies down for the next campaign. Global consumption must be incentivized so that supply pressure does not sink prices again in the next harvest. Without a doubt, the pullback approval of the oil market is still up to be used again; even if it is only a half solution.