W19: Olive & Olive Oil Update

In W19, in the olive and olive oil landscape, an extended drought in Spain contributed to a rise in worldwide olive oil prices to a 26-year high of USD 5,989.8/MT. According to the meteorological agency AEMET, the total rainfall since October 1 is 25% less than what is usual in Spain for this period and 50% less than normal in Andalusia. Due to unfavorable weather, Spain harvested 50% fewer olives from October 2022 to February 2023, and the country produced 630K MT of olive oil instead of the usual 1.4-1.5MMT. The demand for olive oil grew due to the shortage of sunflower oil brought on by the conflict in Ukraine. However, demand has now started to decline as customers have started to use olive oil more sparingly and moved to other forms of vegetable oils due to the rise in olive oil prices. Additionally, Spain's exports of olive oil decreased by 14% in the first half of 2022/23 and by 23% in Q1 2023.

Since 2018, the United States has levied a 35% tax on Spanish olives, a move that was condemned by the World Trade Organisation (WTO) in 2021. The EU has once again requested that the US abide by the WTO resolution to remove duties on Spanish black olives, but the US administration still refuses. The US has no intention of removing tariffs on black olives unless it is compelled to. With no assistance from the EU, the Spanish black olive export industry has lost 70% of its exports to the US since 2018, totaling USD 251.56M. Lastly, in the UK, cucumbers, olive oil, and cheese topped the UK inflation chart in March, with olive oil prices increasing by 49% YoY in March.