W30: Olive & Olive Oil Update

In W30 in the olive and olive oil landscape, global olive oil production in the 2022/23 campaign decreased by 26% to 2.50 million metric tons (mmt) compared to the 2021/22 season, with Europe experiencing a significant decline of 39%. This scarcity has led to higher prices on the continent, resulting in decreased consumption of olive oil, further affected by inflation. Non-European Union countries such as the United States (US), China, Canada, and the United Kingdom (UK), which are major importers of European olive oil, have also seen declines in their imports due to the increased prices. Spain is expected to reduce its olive harvest by more than half, from 1.37 mmt to 680 thousand mt. Italy and Portugal also saw substantial drops in output, with estimated reductions of 30% and 40%, respectively. Meanwhile, Greece, another significant olive producer in Europe, faces massive fires, with over 10,000 hectares (ha) of agricultural land burned in Rhodes alone, accounting for approximately 10% of the island's total area.

Additionally, the global price of olive oil reached a historical high in mid-July to USD 7,000/metric ton (mt) due to a prolonged drought in the main production regions, especially in Spain. The price of extra virgin olive oil in Spain has sharply increased to USD 8782.80/mt. Prices set in the Lonja de Extremadura range between USD 8233.88 and 8782.80/mt. There have been extra operations at USD 8673.01/mt for extra virgin, around USD 8233.88/mt for virgin, and USD 7300.70/mt for lampante due to increased production costs and product shortages. Furthermore, Spanish olive oil exports have plummeted by 40% in volume to 281 thousand mt, valued at USD 1614.94 million, in the first five months of 2023 compared to the same period in 2022. The decline in sales abroad is expected to worsen starting in Jun-23 due to limited availability and rising prices. Until June, the mills had produced 662,943 mt, with outputs close to 707,000 mt and stocks of 204,323 mt.

Turkish table olive producers are urging restrictions on bulk olive oil exports to Europe, especially to Spain, to prevent further price hikes in table olives and olive oil. Drought in Spain, Italy, and France has caused a significant 60 to 70% loss in olive tree yield compared to previous years, therefore, these countries are importing bulk olive oil from other producers, driving up demand and increasing olive oil prices in Turkey from around USD 0.56/kg to approximately USD 1.30/kg. Turkey's earnings as a producer country are low as bulk olive oil is sold in countries dominating the global market. Lastly, in Manisa, Turkey, the region with the highest number of olive trees, there was a decrease in olive yield caused by hail and heavy rains in April-May and the dry summer months. As a result, it is predicted that the price of olive oil will reach USD 9.27/liter for the season.