W33: Olive & Olive Oil Update

In W33 in the olive and olive oil landscape, Spanish olive oil prices remained above USD 8.72/kg EXW. In Catalonia, extra virgin olive oil prices surpassed USD 8.69/liter in mid-July, approaching the world's most expensive Italian olive oil priced at USD 9.55/liter. The lack of supply continues to drive Spanish olive oil prices upwards due to the lack of rain during the last two years, marking the most severe market situation of the century. This coupled with rising production costs, threatens an already struggling sector. High temperatures and water shortages during the spring affected flowering, emphasizing the need for a rainy autumn. This trend extends to Spain, Italy, Greece, and Tunisia.

Turkish olive oil prices have increased by 120% year-on-year (YoY). In Nov-22, bulk olive oil was priced at USD 3.75/liter in the Turkish market, which rose to USD 4.25/liter by Apr-23. Subsequently, there was a swift escalation, with global prices reaching USD 8/liter and Turkish prices hitting USD 6/liter.

The Tunisian olive and oil sector holds promising prospects for the upcoming year. Over the last decade, Tunisia has consistently produced an average of 228 thousand metric tons (mt) of olive oil annually, with exports averaging 216 thousand mt. Consumption has remained relatively low, at an annual average of 33.6 thousand mt. The government aims to enhance production by renewing 1 thousand hectares (ha) of old olive groves annually, introducing new varieties, and converting 10 thousand ha of rainfed areas into super-high-density plantations. It's noteworthy that approximately 93% of Tunisia's olive groves rely on rain-fed conditions.

Argentina is the primary producer and exporter of olive oil in South America, with olive oil production totaling 40 thousand metric tons (mt), and 37.2 thousand mt being exported, primarily to the United States (US), Spain, and Brazil. Notably, the Buenos Aires district of Coronel Dorrego, with around 2.5 thousand hectares (ha) of olive trees cultivated for about half a century, has become the new Provincial Capital of the Olive Tree. In 2022, the average annual olive oil production was 1 million liters, and 48% of this production came from Coronel Dorrego, showcasing the active expansion of olive-growing activity in the region.