Olive

Morocco

Climate Change, Water Resources Are the Biggest Challenges to Olive Yields in Morocco

Two significant challenges to olive cultivation in Morocco have been identified as climate change and water availability. The 2021/22 season saw Morocco experience its worst drought in decades, with temperatures approaching 50 degrees Celsius and dry, scorching winds that reduced agricultural productivity across the board. The country's dams and reservoirs of water saw a drastic decline as a result of the low precipitation, which had an impact on both irrigation-dependent agriculture and crops that depended on rain.

Virgin Olive Oil

Global

World Olive Oil Production Will Fall by 20% In the 2022/23 Season, According to the IOC

According to projections made public by the International Olive Oil Council, global olive oil production will drop 19.7% in the 2022/23 campaign and reach 2.73 MMT. Throughout the European Union, production of olive oil will fall by 33.8% compared to the 2021/22 campaign, with decreases of 47.7% in Spain, 50.9% in Greece, 39.4% in Portugal, and 28.6% in Italy, according to their forecasts. In the course of this campaign, imports of olive oil will rise in Spain and Italy by 38.6% and 32.2%, respectively. In contrast, exports of olive oil will fall in France by 63.9%, Spain by 35.8%, and Italy by 20.9%; however, Greece will grow by 14.3%.

Global Olive Oil Sector Is Going Through a Difficult Time

The expert noted that the production of olive oil has decreased globally, per IOC estimates, compared to the previous campaign. During the 2021/22 campaign, the production stood at 3.72MMT, while for the 2022/2023 campaign, the data indicates a production of 2.73MMT, which represents a decrease of 19.7% YoY. In contrast, the IOC member identified Spain and Italy as the two largest EU countries in terms of imports, with increases of 38.6% and 32.2% compared to the 2021/22 campaign. When it comes to exports, the olive oil campaign in France has seen a decline of 63.9% compared to the 2021/22 campaign. Spain came in second with 35.8%, followed by Italy with 20.9%, while Greece has grown by 14.3%. Globally, there is a decrease of 16.6%.

Spain

Olive Oil Sales Total 20M Litres in January, 17% Less YoY

According to the National Organization of Edible Oil Bottlers and Refiners Industrialists (Anierac), sales of olive oil in January 2023 were 20M litres, which is 17.33% fewer YoY. The market obtained 93.81M litres of olive oil in the first four months of the 2022/23 campaign, a 7.37% decline from the same period of the previous campaign.

High Price of Extra Virgin Olive Oil in Spain Due to Global Shortage

Global olive oil production is usually around 3.2MMT, but this campaign, which is considered a transition campaign, is not expected to exceed 2MMT. As a result of the shortage, the sale prices for extra virgin olive oil are high, ranging around USD 5.63/kg EXW versus USD 3.51/kg EXW in 2022. These price levels have affected demand, which is 15-20% less than in 2022, but not in a pronounced way, due to good demand from emerging markets such as the US, Canada, and Japan.

The IOC Estimates the Drop in Olive Oil Consumption in Spain at 27.6%

Spain is at the top of the list of European Union countries that have seen their consumption decline, with 27.6% less than the previous campaign, according to data provided by the International Olive Council (IOC), which shows that global consumption in 2022/23 campaign is 5.7% lower than it was in the 2021/22 campaign. Other producers that are further away, like France or Portugal, have had their respective consumption decline by 5.1% and 3.2%. Moreover, compared to the previous season, less olive oil was produced. The data shows that production in the 2022/23 campaign was 2.73MMT, a 19.7% decline from the 3,72MMT produced in the 2021/22 campaign.

A Critical Stock Is Looming in the Olive Oil Market

According to data gathered by the IOC and DG Agri of the European Union, Spain will start October with a stockpile of olive oil that is estimated to be around 460,942MT, distributed among the main EU countries, of which 233,768MT will be produced in Spain and 175,000MT in Italy. However, the most recent data from the Agriculture DG of the European Commission has evaluated a link between campaigns in all the Community producing countries of only 280,000MT, with which the situation worsens in comparison to the figures handled as of January 30. The balances as of January 30 already show a significant decline in consumption, driven by the sharp increase in costs from the point of origin to the shelf. According to these projections, Spain's domestic consumption will stay at 425,000MT, with a 14% decrease in exports within the community and a 7% decrease outside of it.