W32: Olive & Olive Oil Update

In W32 in the olive and olive oil landscape, global olive oil prices have surged, reaching a new high of USD 8.71/liter in August, surpassing the previous record of USD 7.62/liter set in mid-July. These prices have quadrupled in the last three years due to extreme heat and drought in Southern European countries leading to a substantial supply reduction. European olive oil production is forecast to drop by 40% in the 2022/23 season compared to the 2021/22 season. Spain, the largest global producer, experienced a 56% decrease, Greece saw a 47% reduction, Portugal's production fell by 39%, and Italy recorded a 27% decrease. Outside the EU, Tunisian olive oil production has fallen by 25%, contributing to a global decline of around 26%. Turkey, however, saw a 17% increase in production.

The table olive harvest in Extremadura is expected to commence at the end of August, mainly in the northern region. Significant drought affected olive-producing areas throughout Spain this season. Seville and Tierra de Barros are the hardest hit, where harvesting table olives may be almost impossible due to their smaller size. Instead, these regions might prioritize oil production due to higher oil prices in existing contracts. Unión Extremadura is advocating for an average price of USD 1.28/kg from the industrial sector for this harvest. Proposed contract prices include USD 1.41/kg for first-class olives, USD 0.98/kg for second-class, and USD 0.65/kg for olives used for making olive oil. Any prices below these thresholds would lead to losses for producers, potentially triggering a general protest similar to the one that occurred last year.

Farmers in Eskişehir, Turkey are optimistic about achieving a yield of 5 metric tons (mt) of olives. While olive oil production volumes in Cyprus have remained consistent, their share in the global market is limited, thus not significantly impacting prices. On average, Cyprus produces around 7 to 12 thousand mt of olive oil annually, with the majority being high-quality extra virgin oil, and between 500 to 2 thousand mt are exported yearly. In 2022, Cyprus exported olive oil worth USD 1.62 million, primarily to European countries, notably Iceland. 

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