1. Weekly News

Australia

Australian Extra Virgin Olive Oil Prices Surge Due to Lower Yields and Rising Costs

Extra virgin olive oil prices in Australia have hit record highs, surpassing USD 16.83 per liter (AUD 25/L). Drought, labor costs, and alternating olive tree production cycles contributed to reduced yields. While larger producers benefit from economies of scale, smaller farms struggle with rising costs and natural challenges like frost and pests. Despite lower harvests in 2024, the quality of olive oil remains high, and there are hopes for price stabilization due to improved local yields and expected recovery in European production.

Egypt

Egypt’s Olive Oil Industry Faces Challenges Amid Export Potential

Egyptian officials emphasize the potential of table olives and olive oil as key export sectors, with the country ranking third globally in table olive exports. In 2023/24, Egypt produced 40 thousand metric tons (mt) of olive oil, with nearly all of it sold domestically. While producers like Rammah Olive Oil invest in quality improvements and sustainability, challenges such as political instability, bureaucracy, and lack of skilled labor hinder growth. The government aims to boost exports to bring in foreign currency, with plans to expand olive cultivation and attract foreign investments. However, producers must focus on understanding market demands and improving export strategies.

European Union

EU Tightens Regulations on PAH Levels in Virgin Olive Oil

The European Commission (EC) is set to impose stricter limits on polycyclic aromatic hydrocarbons (PAHs) in virgin and extra virgin olive oil due to their carcinogenic properties. PAH contamination in olive oil can occur through milling processes, air pollution, and chemicals in chainsaws and jute sacks. Under the new rules, oils containing PAHs will be deemed unfit for consumption and relegated to biodiesel production. Producers are advocating for a delay in implementation, while researchers believe the regulations will boost public trust in olive oil quality.

Greece

Olive Oil Production in Greece Set to Increase, Raising Hopes for Price Reductions

Greek olive oil production is projected to reach between 220 and 230 thousand tons, nearly doubling last year’s output, according to the general manager of the Eleourgiki, the Cooperative Association of Greek Olive Producers. This increase, along with improved production across the Mediterranean, is expected to alleviate the high prices caused by the war in Ukraine and unfavorable climate conditions. With higher production levels, prices are likely to decrease.

Italy

Italian Olive Oil Production Forecasts Drop by 32% Due to Drought

Italy’s olive oil harvest this year began earlier due to unusually high temperatures, especially in southern regions like Apulia, which saw production drop by 50%. National production for 2024/25 is expected to reach 224 thousand tons, marking a 32% decrease compared to last year. Drought and heat stress severely affected olive trees, particularly in Apulia, Calabria, and Sicily. Despite the lower yield, experts predict good quality for this year's olive oil. Italy is now ranked fifth globally in olive oil production.

Italian Police Uncover Olive Oil Fraud Scheme

The Italian financial police, Guardia di Finanza, uncovered a major fraud involving two companies selling adulterated extra virgin olive oil. Six individuals face charges for commercial fraud and falsifying geographical indications. The investigation revealed that 540 tons of Greek olive oil were falsely labeled as Italian, and 500 tons from previous seasons were misrepresented as freshly produced. The fraudulent operations generated illegal profits exceeding USD 1.03 million (EUR 940 thousand). Authorities have seized both companies involved, located in Brindisi and Rieti, while the investigation continues.

Paraguay

Paraguay’s Demand for Spanish Extra Virgin Olive Oil Grows

Paraguay's demand for premium olive oils, particularly extra virgin, has grown in recent years. In 2023, Spanish olive oil imports rose by 8.2% year-over-year (YoY), reaching USD 3.07 million, with Spain remaining the largest supplier. Global olive oil production fell by 33% due to adverse weather, driving up prices, but Paraguay's preference for high-quality oils continued to rise. Extra virgin olive oil imports grew by 20% YoY, presenting opportunities for Spanish exporters to expand in the premium segment, especially with favorable trade conditions and simplified distribution channels in Paraguay.

Spain

Recovery in Olive Oil Production in Spain for 2024/25

The first estimates for Spain’s 2024/25 olive oil harvest indicate a recovery to average production levels following two exceptionally low seasons. The Ministry of Agriculture forecasts a total production of 1.26 million tons, a 48% increase from the previous year and 4% above the average of the last six campaigns. Favorable spring rains contributed to strong olive flowering, especially in dryland areas, though upcoming weather conditions will be crucial for the final yield. Andalusia is expected to lead with 1.02 million tons, representing 81% of the national total.

Olive Oil Stocks in Spain Reach 271.9 Thousand Tons by Aug-24

As of the end of Aug-24, Spain's olive oil stocks stood at 271.9 thousand tons, according to Food Information and Control Agency (AICA) data. With average monthly sales and imports considered, the campaign was projected to close at around 200 thousand tons in stock in September. The accumulated sales for the first 11 months of the 2023/24 campaign reached 1.055 million tons, a 3.9% increase compared to the same period last year but 24% below the four-year average. Domestic sales saw a 19.1% rise, while exports remained stable, and imports grew by 15.7%.

Spanish Olive Oil Exporters Face Challenges Due to US Port Strike

Spanish olive oil exporters are facing challenges due to an ongoing strike at United States (US) East and Gulf Coast ports, which began on October 1. The strike jeopardizes Spain's position as the leading olive oil supplier to the US, where exports reached 180 thousand mt last year. The value of these exports has doubled to USD 765 million (EUR 693 million) in 2024, despite falling domestic consumption. Asoliva, the producers' association, noted that no viable alternative shipping routes exist. Producers are hopeful for a quick resolution to the strike, having increased shipments before it began, but analysts warn that perishable goods will be the first affected by the disruptions.

2. Weekly Pricing

Weekly Olive Oil Pricing Important Exporters (USD/kg)

Yearly Change in Olive Oil Pricing Important Exporters (W40 2023 to W40 2024)

Italy

Italian olive oil prices slightly decreased to USD 10.21 per kilogram (kg) in W40, reflecting a 1.16% WoW drop from USD 10.33/kg in the previous week. This change comes amid a 0.97% decline compared to the month prior, largely influenced by the devaluation of the EUR, which in W39 accounted for USD 1.1172 and in W40 for USD 1.1035. However, the YoY comparison reveals a 6.13% increase from USD 9.62/kg in W40 2023, driven by significant challenges in domestic production. The olive oil harvest forecast for 2024/25 has plummeted by 32% due to drought and extreme heat affecting key regions like Apulia, where yields have decreased by nearly 50%. As Italy's production is anticipated to reach only 224 thousand tons, the impact of dwindling stocks and increased demand could lead to continued price volatility as the market adjusts to these production challenges.

Tunisia

Tunisian olive oil prices have decreased to USD 8.31/kg in W40, marking a 0.60% WoW decline from USD 8.36/kg in W39. Over the past month, prices have dropped by 0.95%, largely influenced by the devaluation of the EUR. This currency shift has impacted the international pricing of Tunisian olive oil. Although current prices have slightly softened, they may recover in the coming weeks due to high global demand, particularly from major markets like Spain and Italy, as the global olive oil supply has contracted significantly. This tightening supply could place upward pressure on prices moving forward.

3. Actionable Recommendations

Source from Countries with Increasing Supply

Buyers should explore sourcing from countries like Greece, Spain, and Portugal, which are forecasting positive olive oil production for the upcoming season. Greece is expecting significant increases, and Spain and Portugal are also anticipating improved harvests due to favorable climate conditions. These regions present valuable opportunities to secure more stable supply and competitive prices, especially as production in other key markets like Italy and Australia has been hit by adverse weather. Establishing strategic partnerships with producers in these countries can help ensure consistent supply and minimize exposure to price volatility.

Explore New Markets Amid US Port Strike

Spanish olive oil exporters should actively explore alternative markets to mitigate the impact of the US port strike. Emerging opportunities in Latin America, particularly in Paraguay, Colombia, Ecuador, and Chile, where demand for premium olive oil is growing, offer a strategic option for diversification. This could also provide a buffer against disruptions in the US market. By targeting these regions, Spanish producers can reduce reliance on US exports and secure more stable trade routes.

Explore Alternative Oil Options Globally

To manage global supply shortages and high prices in olive oil, producers across various countries should consider diversifying their product offerings by incorporating alternative oils such as avocado oil, sunflower oil, and canola oil, or oil blends. This approach can help mitigate the impact of rising olive oil prices while catering to consumers seeking healthier or more sustainable options. By marketing these alternatives alongside traditional olive oil, producers can capture a broader customer base and enhance their market resilience, providing flexibility during periods of high demand and constrained supply in the olive oil sector.

Sources: Tridge, Agro CLM, Agro Popular, Agro Typos, Cuaderno Agrario, Ekathimerini, El País, Food Fakty, Oleo Revista, Olive Oil Times, Reuters