W3 Olive and Olive Oil Update: Manisa Emerges as Türkiye's Olive Hub, While Spain's Olive Oil Industry Confronts Challenges

Manisa Emerges as Türkiye's Olive Hub

The olive harvest season in Manisa, a prominent hub for olive cultivation and table olive production in Türkiye, has concluded. As affirmed by the Manisa Provincial Directorate of Agriculture and Forestry, the latest findings from the National Olive and Olive Oil Council (UZZK) reveal Manisa's dominance in Türkiye for its abundance of olive trees. The region boasts 24.3 million fruit-bearing trees and an additional 6.2 million non-fruit-bearing trees, contributing to a grand total of 30.5 million olive trees throughout the province.

The 2023 olive harvest in Manisa is estimated to yield approximately 251.1 thousand metric tons (mt), with an expected production of 22.7 thousand mt of olive oil. It's noteworthy that Manisa also clinches the top spot in table olive production in Türkiye. The collaborative efforts involved field visits to olive gardens across 17 districts in Manisa, where assessments were made in conjunction with technical personnel from the Provincial Directorate of Agriculture and Forestry. The harvest, which commenced in Sep-23, was meticulously evaluated alongside producers to gain insights into the season's outcomes.

Spain's Olive Oil Industry Faces Challenges as Prices Surge

Over the last three years, olive oil prices in Spain have surged by 165.5%, with a notable 54.6% year-on-year (YoY) increase in Dec-23. Contributing factors include adverse weather conditions, particularly drought, impacting the harvest, and a decline in overall production. The Spanish Ministry of Agriculture projects a total olive oil production of 765.3 thousand mt for the 2023/24 agricultural year, showing a 15% YoY improvement but still 34% below the average of the past four years. Olive oil stocks have witnessed a substantial 43% YoY decrease at the beginning of the current campaign, with a more significant decline of 52% below the average. Concurrently, olive oil consumption in Spain registered a 20% decline between Nov-22 and Nov-23.

In a bid to support the industry, The Spanish Government has announced the removal of value-added tax (VAT) on olive oil, starting Jan-24, categorizing it as a staple food item. This move aligns with the government's efforts to address inflation concerns amid the ongoing economic crisis. The decision follows Portugal's implementation of zero VAT on olive oil. Previously, Spain imposed a 5% VAT on olive oil. The Spanish Minister of Agriculture, Fisheries and Food, suggested that supermarkets in the country initiate zero VAT on olive oil even before legislative approval. Notably, Spain's VAT on olive oil was higher than some European Union (EU) counterparts, with Greece having the highest at 13%. Minister Planas emphasized the government's commitment to reducing VAT on essential food items, already applying zero VAT on fruits and vegetables in Madrid.

Spain, being the largest global producer of olives and olive oil, contributes 70% to the EU's total output and 45% to the world. The country's olive groves, spanning 2.75 million hectares (ha), with 80% of production concentrated in Andalusia in the southern region, face challenges. Other major producers, Italy and Greece, encountered issues in the previous year. Although Türkiye witnessed increased production, the country had to implement export restrictions to stabilize domestic prices.