1. Weekly News

European

EU Sees Record Fraud and Mislabeling Cases in the Olive Oil Industry in Q1-2024

In Q1-2024, the European Union (EU) recorded 50 cases of fraud or mislabeling in the olive oil industry, marking a significant increase compared to the 132 cases reported in 2023. According to the EU's Health and Food Safety Department, these figures only account for incidents reported between EU countries, with many instances from domestic markets going unreported by local authorities. Most cases involved mislabeling cheaper oil blends as virgin olive oil, while some involved contamination with banned substances like pesticides, mineral oils, or even glass fragments. Europol attributes the rise in counterfeit premium olive oils to escalating inflation, decreased production volumes, and heightened demand.

Spain and Italy

Spain's Dwindling Reserves and Italy's Severe Drought

The olive oil market is closely monitoring Spain’s dwindling reserves, with less attention on the severe drought impacting Italy, as the upcoming harvest is expected to alleviate current stock shortages. As of June 30, 2024, Spain’s olive oil stocks were approximately 415 thousand metric tons (mt), primarily held by oil mills, bottlers, and operators. Despite this, Spain's anticipated increase in olive oil production for the 2024/25 season could lower prices.

Due to drought, Italy's stocks have diminished, raising concerns about possible production cuts. However, Italy's low reserves are less critical due to its reliance on imports from Spain, Greece, and Tunisia. The EU is forecasted to see a 12% year-on-year (YoY) decline in olive oil stocks by the end of the 2023/24 season, with production fluctuations expected in Spain, Italy, Portugal, and Greece.

Spain and Slovakia

Slovakia's Olive Oil Market Grows with Spanish Imports Leading

The olive oil market in Slovakia is expanding due to imports from Spain, which held a 43.7% share in quantity and 44.28% in value as of 2023. With no local production, Slovakia depends entirely on imports, with Italy and the Czech Republic also serving as significant suppliers. Although cheaper vegetable oils and traditional fats present competition, the increasing interest in healthy eating provides growth opportunities for olive oil, particularly extra virgin varieties. Slovakia's olive oil sales are forecasted to increase by 24.2% in value between 2023 and 2028, outpacing the growth of other vegetable oils.

Egypt

Egypt's Olive Oil Industry Prepares for Codex Specification Changes

The Chamber of Food Industry in Egypt convened a critical meeting for olive oil and olive pomace producers to discuss industry developments and future strategies, especially in light of forthcoming changes to the international Codex specification. The meeting included over 50 government, research agencies, and private sector stakeholders. The discussions highlighted the strategic value of olives and olive oil as export crops, the need for precise production data, and the potential removal of ordinary virgin olive oil from the list of consumable oils, signaling significant shifts in industry standards and practices.

Morocco

Climate Change Hits Morocco's Olive Oil Production

Morocco's olive oil production is facing a crisis due to climate change. Challenges such as inadequate irrigation, decreased rainfall, and high temperatures are hampering the flowering of olive trees. As a result, the price of olive oil has surged, and further increases are forecasted. This situation has prompted calls for government intervention, including stopping exporting olive oil, underscoring the sector's susceptibility to climate-related and economic challenges.

United States

AOOPA Allocates USD 2 Million to Boost Sustainable Olive Oil Production in California

The American Olive Oil Producers Association (AOOPA) allocated USD 2 million to fund projects related to olive plantations in California. This financing supports California farmers, agricultural businesses, and nonprofits involved in olive oil production. The grant is designed to promote practices that improve soil health, reduce greenhouse gas emissions, and enhance carbon storage in agricultural areas.

2. Weekly Pricing

Weekly Olive Oil Pricing Important Exporters (USD/kg)

Yearly Change in Olive Oil Pricing Important Exporters (W31 2023 to W31 2024)

Spain

In W31, Spain’s olive oil price increased slightly by 0.52% week-on-week (WoW) to USD 0.70 per kilogram (kg) in W31 compared to USD 7.66/kg in W30. The price increase is due to the pressure from the decreasing inventory. As one of the largest olive oil suppliers, the inventory decline has attracted significant attention from the global market. Global olive oil demand has increased due to the interest in healthy eating patterns, which led to a supply shortage globally. However, as the production in Spain is expected to recover in the 2024/25 season, the price will likely stabilize.

Italy

Italy’s olive oil price increased by 0.90% WoW to USD 10.1/kg in W31, compared to USD 10.01/kg in W30, showing a slight rise due to concerns about supply shortages. As of June 30, 2024, the country’s olive oil stock declined by 12% month-on-month (MoM) and 23% YoY to 179.42 thousand mt. The drought has significantly impacted olive oil production and olive groves in the Mediterranean region, especially in southern Italy, where concerns about water scarcity and high temperatures lead to reduced agricultural output.

Portugal

In Portugal, the price of olive oil in W31 stood at USD 11.33/kg, reflecting a WoW increase of 0.89% from USD 11.23/kg in W30. This rise is primarily due to the euro's appreciation against the United States (US) dollar. In euros, the price has remained consistent throughout the month, but currency exchange fluctuations have caused changes in the dollar price and a MoM increase of 0.98%. The YoY price has surged by 45.07% from USD 7.81 in W31 2023, driven by higher global demand for olive oil and a poor harvest in production countries.

Tunisia

In Tunisia, the price of olive oil was USD 7.9/kg in W31. Since 2006, Tunisia has been improving its capacity in the oil packaging sector by creating a specific fund for this industry, which has supported the exports. As of Jun-24, the country’s olive oil exports surged by 80% YoY in the 2023/24 season. Although Tunisia has maintained this stability over the past couple of months, the drought in Italy and low inventory in Spain could increase prices due to the high global demand for olive oil.

3. Actionable Recommendations

Strengthen Regulatory Oversight and Market Surveillance

Strengthening regulatory oversight and market surveillance is essential to combat the rising cases of olive oil fraud and mislabeling in the EU. Authorities should implement stricter labeling laws and increase random testing of olive oil products across member states. The EU should collaborate with Europol and other enforcement agencies to detect and dismantle fraud networks. By enhancing these measures, the EU can protect consumers, maintain the integrity of its olive oil market, and ensure that only authentic products reach the shelves.

Optimize Inventory Management Amid Fluctuating Production

Given Spain's dwindling olive oil reserves and the expected production increase for the 2024/25 season, Spanish producers and distributors should optimize inventory management to balance supply and demand effectively. Strategic stockpiling during peak production times and careful monitoring of export levels can help stabilize domestic prices and prevent market shortages. Additionally, exploring opportunities to enhance irrigation and farming techniques could mitigate the impact of droughts on future harvests, ensuring a more consistent supply of olive oil.

Align Production Practices with Upcoming Codex Changes

With impending changes to the international Codex specifications, Egypt's olive oil producers must align their practices with the new standards to remain competitive in global markets. This includes updating production processes to meet the stricter requirements and investing in research to improve product quality and traceability. By proactively adapting to these changes, Egyptian producers can enhance their reputation for high-quality olive oil and potentially access new export markets, prioritizing compliance with international standards.

Sources: Tridge, Eastfruit, PEefeagro, Oleorevista, Almalnews, Agrimaroc, OliMerca