Weekly Product Updates

W47 Olive & Olive Oil Update: Global Olive Oil Market Reaches USD 15.4 Billion in 2023 and European Olive Oil Price Surge

Market & Price Trends
Olive Oil
Published Dec 1, 2023

Global Olive Oil Market Reaches USD 15.4 Billion, Spain Leads Production with a 25% Market Share

The global olive oil market has achieved USD 15.4 billion (EUR 14.2 billion). The production of olive oil in the European Union (EU) countries has decreased significantly, to 1.5 million tons in the 2022/23 season, marking the driest year in 500 years. This decline is expected to continue in the 2023/24 season, although the exact cause remains unclear. Spain is the leading olive oil producer worldwide, with a 25% market share. Italy, Morocco, and Tunisia follow Spain in olive oil production. Despite its success, the olive industry in the Mediterranean encounters numerous challenges, including price volatility, competition with other vegetable oils, and issues related to fraudulent labeling. However, the most pressing concern is climate change. If temperatures increase by 1.5ºC, the global olive oil production is anticipated to decline by 20%.

European Olive Oil Production Crisis Spurs Price Increase in Turkey

According to data from the International Olive Council, Spain's olive oil production declined significantly from 1.49 million tons in the 2022/23 season, to 780 thousand tons in the 2022/23 season due to the prolonged drought. This represents nearly a 50% reduction in production year-over-year (YoY). Italy, the second-largest producer globally, decreased from 329 thousand tons, to 235 thousand tons in the same period. The decline in production has increased prices, prompting Spain and Italy to turn to Turkey and other producing countries to compensate for the shortfall. The European production crisis has resulted in high demand and subsequent price increases in Turkey.

Turkish Olive Producers Express Concerns Over Low Yields Due to Climate Factors

Olive producers in Manisa's Sarıgöl district in Turkey are concerned about low yields in 2023 due to El Nino heat and the Mediterranean fly's summer effects. Turkey's olive oil production is expected to decrease from 400 thousand tons in 2022 to around 150 thousand tons in 2023, largely due to poor olive harvest. Despite the decline, consumers in Türkiye should not face a shortage of olive oil, as the market will continue to have olive oil in stock from last year. The olive harvest will continue until the end of Dec-23.

Turkey's Olive and Oil Exports to the UK Surge Following Zero Customs Duty Negotiations

Turkey's olive and oil exports to the United Kingdom (UK) have significantly increased following zero customs duty negotiations. The Aegean Exporters' Associations organized a special trade delegation in London for the food products sector, introducing various products from dried fruits to olive oil, fruit and vegetable products, and spices. The aim is to increase Turkey's market share in the UK, which imports 70 thousand tons of olive oil annually. Efforts to increase the share of Aydin's yellow gold olive oil in the UK market continue. Still, customs duty on olive oil exports will be zeroed after the negotiations.

Severe Drought and High Temperatures Reduce Afghanistan's Olive Production

Algeria's olive-growing industry has been severely impacted by drought and high temperatures, reducing olive production in Afghanistan. With a planting area of 440 thousand hectares (ha), Afghanistan's olive production is expected to decrease by half in 2023. The rising production costs and general reduction in production have led to a rise in the price of olive oil in the international market, with prices per liter rising from USD 2.18 to 3.27 per liter (l) to USD 8.73 to 9.82/l. In Afghanistan's local market, the price of ordinary olive oil has increased from USD 7.19 to 8.63/l to USD 14.38/l, and the price of virgin olive oil has exceeded USD 21.57/l. Despite Afghanistan's high quality and low acidity, the country's olive oil production has not been exported in large quantities due to low business environment and production, processing, packaging, and logistics issues. The main export markets for olive oil are France, Italy, and the United States.

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