W48: Weekly Olive & Olive Oil Update

Europe

The EU Finances With USD 7.32M on a Study on the Soil of the Olive Grove

The European Union has signed an agreement with the University of Jaén for USD 7.32M to study the effect of agricultural management on the general state of health of the soils of Mediterranean olive groves and its impact on the production and quality of olive oil produced in the Mediterranean region.  

Olive Oil Production at Historic Lows Across Europe

The olive oil shortage in the 2022/23 season is one of the worst-case scenarios ever seen in Italy and Europe. For the 2022–2023 season, Italian production is about to reach a record low of about 200,000MT Simply put, no olive oil. Italy primarily exports blends of extra virgin olive oil, some partially created in Italy and others of different origins, due to insufficient production to meet a need of 1MMT annually. Therefore, the large production gap will hurt both domestic consumption (with an unavoidable increase in prices) and the revenue of exporting businesses. The drought in 2022 and the late harvest periods in 2022, between October and November, are likely the reasons for the shortage. Additionally, olive oil has been affected by the strong presence of the olive fly in various European production areas.

Meanwhile, Spain will also have a challenging 2022/23 season due to a significant decrease following years of consistent growth that ranged from more than 1MMT to less than 900,000MT in 2022. The impacts are already evident in the increase in costs and decrease in supply. The entire Mediterranean basin is impacted by the issue. With 40% less production in Portugal and a 16% decline in Tunisia, things aren't much better. It is true that different realities, like those in Turkey, Egypt, Morocco, Algeria, and even Libya, are expanding throughout the Mediterranean region.

Spain

Spanish Agriculture Minister Calls for an Effort to Moderate Olive Oil Prices

The Spanish  minister of agriculture, fisheries, and food has urged everybody in the supply chain to shoulder responsibility to keep olive oil prices reasonable and avoid speculative scenarios. In reference to the recent price rise, the minister highlighted that it resulted from the large decrease in olive oil output in the 2022 campaign due to drought and high temperatures. 

Spanish Agriculture Minister Says Olive Oil Could Become a Luxury Product

According to Spanish Agriculture Minister Luis Planas, olive oil could become a "luxury product" in Spain. Droughts and record-breaking heat negatively affected the 2022 harvest, while higher energy prices increased production costs. According to Planas, Spain will likely produce 800,000MT of olive oil in 2022, down from 1.4MMT in 2021. The ministry also urged local market suppliers to keep costs low.

Andalusia Breaks Records in Olive Oil Exports With USD 2592.89M and an Increase of 24.8%

Andalusia has broken the record for olive oil exports, with USD 2592.89M in sales in the first nine months of 2022, a 24.8% increase YoY. In that period, extra virgin olive oil accounted for 62% of total Andalusian olive oil exports. Italy is the leading international market for Andalusian olive oil, accounting for USD 649.01M, or 25% of total sales, representing an increase of 27.8% YoY. This is followed by the United States with USD 462.98M, accounting for 17.9% of the total sales and a 36% increase YoY, and Portugal with USD 272.77M, representing 10.5% of the total sales and a 7% decrease YoY. 

The Sale of Bottled Olive Oil Rose 21% YoY In October 2022

In October 2022, 29.54M litres of bottled olive oil were sold in Spain, representing a 21.18% increase YoY. This include, 11.26M litres of extra virgin olive oil with an increase in sales of 11.9% YoY, followed by 2.08M litres of virgin olive oil, an increase of 3.12% YoY, 13.13M litres of mild olive oil, an increase of 48.92% YoY and 3.06M litres of intense olive oil, a decrease of 11.86% YoY. Overall, total olive oil sales in the first ten months of 2022 totaled 261 million litres, a 1.74% increase over the same period in 2021.

Italy

A Sharp Drop in 2022/23 Olive Oil Production Is Expected, Although Its Quality Is High

In comparison to the 2021/22 campaign, Italy is expected to reduce production by 37%, or more than 120,000MT of Italian olive oil. This could push Italy from second to third place among the world's leading producers, with the 2022/23 campaign producing 208,000MT. Expectations for global availability are also pessimistic, with a drop in Iberian production of 30–50% predicted. Only Greece is expected to exceed last year's levels, reaching over 300,000MT, while outside the EU, Tunisia is expected to have a dump year, with a reduction of around 25%. The long drought and high summer temperatures, in particular, have had an impact on Italian production by hindering the vegetative development of the olive groves.

Morocco

In Light of the High Prices of Olive Oil, Parliamentary Demands to Support Moroccan Farmers

The price of olive oil has risen by 40-50% in 2022 due to climatic changes, which caused a significant drop in the level of production in Morocco. In W48, the price of olive oil reached USD 6.61/litre. Parliament urged the agriculture ministry to assist farmers specialising in olive cultivation, especially since the olive chain contributes 20% of the needs for vegetable oils and is also a significant source of employment.