Weekly Product Updates

W40: Olive & Olive Oil Update

Sustainability & Environmental Impact
Olive Oil
Market & Price Trends
Published Oct 13, 2023

In W40 in the olive and olive oil landscape, Spain’s Minister for Agriculture, Fisheries and Food, Spain's olive oil production in the 2023/24 crop year is projected to fall below the historically low production of 663 thousand metric tons (mt) in the previous year, which is significantly below the four-year average. The poor harvest in 2022/23 and the ongoing drought in the Iberian Peninsula have contributed to these challenges. Recent rainfall improved the situation slightly which caused a slight decrease in olive oil prices, particularly in extra virgin olive oil, which dropped from USD 8.84 per kilogram (kg) on September 14 to USD 8.69/kg in W40. However, experts predict that prices are likely to rise again soon.

The Union of Farmers of Catalonia has raised concerns about the severe drought's impact on olive crops in Catalonia, Spain. Despite recent rainfall, many olives have already fallen, and further rain in the upcoming weeks or months may jeopardize next year's harvest due to tree conditions. The union is urging the administration to provide assistance to olive farms to mitigate these losses. Moreover, crop losses are estimated to be between 60% and 90%, varying by region, and total production is not expected to exceed 7 thousand mt, significantly lower than the usual 33 thousand mt in a typical campaign. In some areas like Alt Camp, Terra Alta, the north of the Ribera de Ebro, and Les Garrigues, dryland olive trees may experience losses of 95% to 100% due to the lack of rain.

The Tunisian Ministry of Agriculture has projected that olive oil production in the 2023/2024 season will reach around 200 thousand mt, marking an 11% increase compared to the previous period. The price of olive oil has risen by 80% from USD 4.80/kg in Mar-23 to approximately USD 8/kg in W40, according to the Tunisian Minister of Agriculture. It is estimated that domestic olive oil prices may reach USD 9.54/kg in the near future due to increased demand, international prices, and reduced global production this year. Nevertheless, Tunisia achieved a record in olive oil exports, with a 54% increase in the first ten months of the 2022/2023 season to the value of approximately USD 940 million.

Lastly, Morocco's Minister of Agriculture, Mohamed Sadiki, has issued a decree prohibiting the export of olive oil to ensure a domestic supply of 9 million liters. This move is a response to the notable increase in olive oil prices, which have reached nearly USD 10.5/liter. Comparable price hikes have been observed in neighboring countries such as Spain, where prices reached USD 9.5/liter. These price increases are driven by supply and demand factors, including low olive production due to persistent drought.

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