W34: Olive & Olive Oil Update

In W34 in the olive and olive oil landscape, in Aug-23, the olive oil price in Andalusia, Spain, which produces over 40% of the world's olive oil, has surged to USD 8.89 per kilogram (kg), an increase of 116% year-on-year (YoY) from USD 4.11/kg in Aug-22. Meanwhile, Italy is facing a rapid depletion of its 100% Italian extra virgin olive oil stocks, resulting in supermarket prices ranging from USD 13.01/liter to USD 14.10/liter in W34, regardless of quality. Data from the Fraud Repression Unit of the Ministry of Agricultural Policies (ICQRF) reveals that approximately 52 thousand metric tons (mt) of Italian extra virgin olive oil were in storage before August 15, an unprecedented figure. During Jul-23, there was a surge in sales due to a shortage of Spanish extra virgin olive oil, leading to a situation where Italian olive oil stocks are expected to run out by the end of Sept-23.

In the 2022/23 season, Italy is facing a 10% decline in olive oil production, with an estimated output of 280 thousand mt. Despite the decline, Italy is in a comparatively better position than other Mediterranean countries. Spain, the world leader in olive oil production, is expected to have a disastrous season in 2022/23, with fires and climate change leading to a production of 600 thousand mt, or a third of its average production. Greece and Turkey are also experiencing poor harvests, with decreases of around 30%, and Tunisia is expected to register a 40% decrease from its estimated 150 thousand mt.

Spain's Deputy Minister of Rural Development announced significant upcoming changes for the Hellenic Agricultural Insurance Organization (ELGA) on Sept-23. The forthcoming bill from the FSA to Parliament will introduce modernizations to ELGA regulations, including compulsory insurance with adjusted premiums. These changes aim to address new challenges, diseases, and risks brought about by climate change and integrate ELGA into the daily activities of those in the primary sector. Additionally, discussions regarding olive harvest issues, particularly fruitlessness, will take place during an informal meeting of EU Agriculture Ministers in Córdoba, Spain, focused on creating a unified approach to compensate olive producers.

In Morocco's Sous region, an unprecedented heat wave with temperatures up to 50 degrees Celsius has caused significant damage to various crops, including olives, tomatoes, peppers, red fruits, banana trees, citrus fruits, and figs. The Moroccan Association of Producers and Exporters of Fruits and Vegetables has called for an assessment of the damage's extent, which is expected to impact domestic production volumes and supply chains.

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