1. Weekly News

Greece

Greece's Olive Oil Production Expected to Surge with 42.8% YoY Increase in 2024/25 Season

According to European Union (EU) estimates, Greece’s olive oil production is expected to significantly rebound in olive oil production, with output projected to reach 250 thousand tons for the 2024/25 season, a 42.8% year-on-year (YoY) increase. This recovery follows two challenging years of drought and heat that severely impacted yields and drove prices to record highs. While late autumn rains have salvaged parts of the crop, regions like Messinia and Crete continue to experience long-term damage to olive trees. Currently at USD 12.64 to 13.70 per liter (EUR 12 to 13/L), retail prices are expected to drop by up to 25% as production improves. Alongside Spain's projected 51% YoY production increase, the global market is expected to stabilize, relieving soaring prices.

Russia

Olive Oil Prices in Russia Expected to Drop as Global Production Surges

According to Spanish producer Deoleo, olive oil prices in Russia are expected to decline significantly in the coming months, potentially reaching USD 5.27/L (EUR 5/L), as production surges and high-quality olives bolster supply. Accounting for 40% of the global market, Spain is projected to nearly double its production to 1.3 million tons for the 2024/25 season, up from 670 thousand tons in 2023/24. Other major producers, including Greece and Tunisia, also forecast robust harvests. After peaking at USD 9.69/L (EUR 9.2/L) in Jan-24 due to drought-induced shortages, prices have already dropped by 35%, with further decreases anticipated as global supply recovers.

Spain

Córdoba's Olive Oil Production Increases as Spain's 2024 Production Forecast Rises

Córdoba, Spain, produced 5.3 thousand tons of olive oil in Oct-24, a 1 thousand-ton increase compared to last year, according to Asaja Córdoba. The favorable rains have increased the province's production forecast to 271 thousand tons, marking a 78.7% YoY rise and 28.1% above the five-year average, pending stable weather conditions. Spain's olive oil production for 2024 is projected at 1.26 million tons, higher than last year but below the pre-drought five-year average of 1.4 million tons. While global production is expected to reach 2.8 to 3 million tons, declines in primary regions such as Greece, Italy, and Morocco temper this growth. Although prices have begun to fall, producers emphasize the need for further reductions to offset rising costs and benefit consumers.

Spain's Olive Oil Prices Declined Sharply Due to Improved Production Forecasts

Olive oil prices in Spain have nearly halved compared to last year, with extra virgin oil now priced at around USD 5,487.06/ton (EUR 5,200/ton), down from USD 10,552.03/ton (EUR 10,000/ton) at the start of 2024. This decline is due to better production forecasts following recent rains, although many producers' prices remain close to the break-even point. While the price drop is expected to benefit supermarket prices in the future, it will take months for the adjustment to be reflected, as existing stock was purchased at higher rates. Additionally, the EU-Mercosur trade agreement, which could enhance olive oil exports, faces delays due to opposition from France, underscoring ongoing agricultural tensions within the EU.

Tunisia

Tunisian Olive Oil Exports Rise 2.4% YoY in Volume and 22.8% YoY in Value for 2023/24 Season

Tunisian olive oil exports for the 2023/24 campaign totaled 192.4 thousand tons, reflecting a 2.4% YoY increase in volume and a 22.8% YoY rise in value. The average price per ton increased by 22.23% to USD 8.40 per kilogram (TND 26.42/kg). Spain, Italy, and the United States (US) were the largest importers, making up 29.2%, 27.4%, and 24.1% of exports, respectively. Organic olive oil accounted for 21.1% of total exports by volume, with 41.2 thousand tons shipped, primarily to Italy, Spain, and France. Packaged organic olive oil represented 6% of this category's exports.

Tunisia Acts to Stabilize Olive Oil Industry and Combat Price Volatility

Tunisia's Ministry of Agriculture is focusing on protecting its olive oil industry to ensure stability for farmers and prevent market disruptions caused by price speculation in the Mediterranean region. With olive oil production expected to reach 340 thousand tons this season, a 55% YoY increase, the government has announced plans for the National Office of Olive Oil (ONH) to purchase significant quantities at competitive prices to combat speculation and monopolistic practices. Additional measures include providing storage facilities at ONH regional centers, introducing storage financing programs, and deploying a technical team to monitor production and pricing for both domestic and international markets.

2. Weekly Pricing

Weekly Olive Oil Pricing Important Exporters (USD/kg)

Yearly Change in Olive Oil Pricing Important Exporters (W47 2023 to W47 2024)

Spain

In W47, olive oil prices in Spain dropped by 8.01% week-on-week (WoW) to USD 5.86/kg, with a 23.30% month-on-month (MoM) decline and a 29.74% YoY decrease. This drop is primarily due to improved production forecasts following recent rainfall, alleviating previous concerns about supply shortages. The enhanced outlook for the upcoming harvest season has exerted downward pressure on prices as buyers anticipate increased availability. Additionally, the delay in the EU-Mercosur trade agreement has slowed export momentum, further contributing to the price decline. Despite these reductions, producers face challenges as prices hover close to or below break-even levels, with existing stocks still priced at higher costs from earlier in the year.

Italy

Olive oil prices in Italy increased slightly by 3.31% WoW to USD 8.43/kg in W47 due to improved demand for high-quality domestic oils as consumers and distributors became more cautious about imported alternatives amid ongoing scrutiny of potential mislabeling. The efforts by organizations like Cia Puglia and Italia Olivícola to promote traceable and ethically sourced Italian olive oil helped support this price recovery. However, MoM and YoY prices dropped by 19.25% and 11.91%, respectively, due to persistent market challenges, including continued competition from lower-priced imports and the lingering effects of market distortions caused by fraudulent practices. The price gap between Italian and imported oils remains significant in undermining broader market stability.

Tunisia

Tunisia's olive oil prices declined significantly by 21.64% WoW to USD 5.72/kg in W47, with a 26.76% MoM decrease. This price decline is due to increased production during the 2023/24 season, leading to higher domestic availability and pressure on prices. The significant rise in production and the ONH’s efforts to stabilize the market through competitive purchasing and storage programs have contributed to an oversupply in the short term. Additionally, ongoing price volatility in the Mediterranean region and competition from other major exporters have intensified downward pricing trends.

3. Actionable Recommendations

Optimize Inventory Strategies During Price Declines

Spanish olive oil producers and distributors should implement dynamic inventory strategies to address the sharp price decline. Producers should prioritize selling existing high-cost stocks to stabilize cash flow while negotiating flexible pricing with distributors to maintain competitiveness. Distributors should capitalize on improved production forecasts by securing new contracts at reduced costs to benefit from anticipated increased supply. Collaborative marketing efforts should also highlight the value of Spanish olive oil in export markets, leveraging improved availability to regain momentum in key trade regions despite the delay in the EU-Mercosur agreement.

Leverage Global Price Trends to Enhance Competitiveness

Olive oil importers and distributors should capitalize on declining global olive oil prices by renegotiating supply agreements with major exporters like Spain, Greece, and Tunisia. Stakeholders should focus on securing bulk purchases at reduced rates while highlighting the improved affordability and quality of olive oil in their marketing efforts to attract cost-conscious consumers. By aligning procurement strategies with the projected global production surge, importers can increase market share and maintain profitability in a competitive landscape.

Securing Competitive Advantage During Production Recovery

Greek olive oil producers and exporters should prepare for price normalization by enhancing the efficiency of their supply chains and diversifying market outreach. Stakeholders must proactively negotiate contracts with international buyers, emphasizing improved availability and competitive pricing. Additionally, they should prioritize branding initiatives that highlight the unique quality of Greek olive oil to strengthen demand in premium and emerging markets, ensuring resilience against global market stabilization trends.

Sources: Tridge, Asaja Cordoba, Agricolae, Agropopular, Cuaderno Agrario, Greekreporter, Milknews, Oleorevista, OliMerca, Shoppers media