Weekly Product Updates

W46 Olive & Olive Oil Update: EU Challenges in 2022/23 Drought and Forecasts for Global Olive Oil Production and Price Increase in 2023/24 Season

Sustainability & Environmental Impact
Olive Oil
Market & Price Trends
Published Nov 24, 2023

USDA Forecasts 15.84% YoY Increase in Global Olive Oil Production for the 2023/24 Season

In W46 in the olive and olive oil landscape, the United States Department of Agriculture (USDA) has released initial estimates for the 2023/24 olive oil campaign, projected to reach around 3 million tons. This figure represents a significant increase of 15.84% year-over-year (YoY), which saw production at 2.49 million tons, marking the lowest level in the past decade. The European Union (EU), representing 70% of the world's olive groves, is expected to contribute 1.8 million tons to the 2023/24 campaign, surpassing the 1.4 million tons produced in the previous campaign. Other production estimates include 310 thousand tons for Turkey, 16 thousand tons for the United States (US), and 755 thousand tons for other olive oil-producing countries.

Global Olive Oil Production Challenges in the 2022/23 Season Due to Spanish Drought

However, the 2022/23 global production of olive oil, particularly in Spain, is facing challenges due to extreme weather conditions, potentially leading to a scarcity of olive oil in the coming year. Spain, which produces about half of the world's olive crop, is experiencing a significant reduction in olive oil production due to drought. The 2022 harvest has been cut by almost half, and ongoing challenges are expected to impact the current year's harvest. Olive prices in Spain reached a record high of USD 9.10 per kilogram (kg) on Sep-23, the highest figure since Oct-13. This situation may increase olive oil prices globally, affecting the EU and US markets.

Moreover, the Andalusia Committee of the Unión de Pequeños Agricultores y Ganaderos (UPA) - in Spain is advocating for direct aid to traditional olive groves due to a significant drop in olive oil production. The committee is pushing for a budget allocation to mitigate the consequences of the second consecutive poor olive oil harvest. The General Secretary emphasizes the importance of aid to smaller and medium-sized farms, as the sector is grappling with a climate crisis causing reduced production and low-fat yields.

Climate Change, Drought, and Rising Prices Threaten Italian Olive Oil Production

Olive oil production in Italy is facing a crisis, with farmers citing climate change as a significant factor leading to the destruction of crops. The International Olive Council indicates that heat and drought have contributed to a price rise in the Mediterranean's three largest producers, including Italy. The Spanish organization notes that oil prices in Spain have increased by 116% over the past year, while Italian farmers anticipate losses ranging from 80% to 90% in the 2022/23 season, with many choosing not to harvest due to high costs during the growing period. The energy crisis and drought further contribute to rising prices, placing an additional burden on consumers.

Olive Oil Prices Surge in Europe due to Drought, Production Declines in Spain, Italy, and Turkey

Drought conditions in Europe are increasing olive oil prices due to decreased production in Spain and Italy, while Turkey is also experiencing increased prices despite an export ban. The TARİŞ Olive and Olive Oil Association in Turkey announced the 2023/24 olive oil purchase price as USD 10.26/kg (TRY 295/kg), a 264% YoY increase. The impact of drought and imbalanced rainfall has led to a 57% YoY decrease in olive oil production in Turkey. While estimates suggest a yield of 179 thousand tons for the 2023/24 season, the country is expected to navigate the season more comfortably due to the remaining product from the previous year.

India Grants Protected Geographical Indication (PGI) to 'Kalamata' PDO Extra Virgin Olive Oil, Increasing Greek Exports

In India, the Union of Messinia has successfully registered the protected geographical indication (PGI) for "Kalamata" PDO Extra Virgin Olive Oil, ensuring protection against counterfeiting and establishing approved specifications. This is crucial for Greek exports in the Indian market, a strategic destination with a population of 1.36 billion, one of the world's largest.

Parliament Raises Concerns as Olive Oil Prices Surge in Morocco

The significant increase in olive oil prices in Morocco, reaching about USD 9.88 per liter (MAD 100/L), has sparked citizen controversy and raised concerns in Parliament. The Parliamentarian addresses the Minister of Agriculture, Fisheries, Rural Development, Water, and Forests, highlighting citizens' surprise at the steep price hike, previously around USD 4.94/L (MAD 50/L). While the scarcity of olive production in 2023 justifies the price increase, there are concerns that speculators are acquiring and monopolizing most of the available quantities in the market, imposing their own pricing "law" on Moroccans. This issue is of particular importance given the vital role of olive oil, especially with winter approaching.

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