Weekly Product Updates

W4 Olive and Olive Oil Update: Spanish Extra Virgin Olive Oil Hits Record High, Surging 68% YoY in Mid-Jan-24, Prompting Concerns About Production Shortfalls

Olive Oil
Published Feb 2, 2024

Morocco's Canned Olive Exports Hit 10-Year Low in 2022/23 Season Amid Drought Challenges, Anticipates Recovery in 2023/24 Season

In the 2022/23 season, Morocco experienced a notable decline in canned olive exports, nearly reaching a 10-year minimum at 82 thousand metric tons (mt), almost a third less than the previous season. The significant drop is due to a reduced fresh olive harvest caused by the 2022 drought. This led to a collapse in canned goods and olive oil production, aligning with similar trends in other Mediterranean countries. The global surge in olive oil prices and export bans prompted Morocco to join restrictions in the fall. In contrast, the import of canned olives to Morocco surged nearly 11 times to 3 thousand mt during the same season, compared to previous years where it rarely exceeded 500 mt. Despite being one of the world's leading olive producers, Morocco faces challenges in the canned olive market, with the European Union (EU) and North America being the primary purchasers. In the 2023/24 season, local industry representatives anticipate a recovery in olive production, despite challenging weather conditions like drought, intense sun, strong winds, and hail across the country in 2023.

Spain’s Olive Grove Sector Battled Drought, Inflation, and Record-Low Production in 2023

The Spanish agricultural sector, particularly olive grove production, faced significant challenges in 2023 due to drought, altered weather patterns, and marked inflation in production costs. The latest data from the Ministry of Agriculture indicates the lowest olive production in the last decade, nearing the levels of limited harvests in 2005 and 2012. High temperatures experienced early in the season compromised fruit formation, impacting production volume. Despite reduced output, the final price of olives has reached historical highs, mitigating the impact of inflation on production costs since 2022.

Spanish Extra Virgin Olive Oil Prices Surge 68% YoY in Jan-24

In mid-Jan-24, Spanish extra virgin olive oil prices reached a record high of USD 9.70 per kilogram (kg), reflecting a significant 68% year-on-year (YoY) increase. Concerns arise over potential shortfalls in the 2023/24 Spanish olive oil production, which may drop below initial estimates of 700 thousand mt. Additionally, the Consumer Prices Agency reports a substantial surge in average prices, with the cost per liter rising from USD 7.46/kg in Jan-23 to USD 12.95/kg in Jan-24, potentially impacting consumer preferences and affordability.

Stabilized Greek Olive Oil Market Faces Limited Availability and Cautious Demand

The olive oil market in Greece has stabilized around USD 10.20/kg in Laconia, with slight variations between USD 9.39 and 10.04/kg for the three production lines in Messinia and Crete. While the market recently experienced a surge, it is now reevaluating price levels to gauge consumer reactions. Limited availability is a key factor preventing new record highs, and the market strength is attributed to the supply condition. However, demand from brokers and traders in Greece is currently subdued compared to previous years, though there are identified needs from the domestic standardization industry.

Japan to Adopt IOC Standard for Olive Oil Labeling in Mar-24

The International Olive Council (IOC) welcomed a delegation from the Japanese Oilseed Processors Association (JOPA) in W4 to enhance their relationship, driven by Japan's increasing interest in the olive oil sector. The first non-IOC member, Japan will adopt the IOC trade standard for olive oil labeling starting Mar-24. This JOPA-led initiative showcases Japan's dedication to aligning with international standards, with the country already having five recognized physicochemical and analysis laboratories and two tasting panels endorsed by the IOC.

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