Europe expects olive oil consumption to increase mostly in non-producing countries and exports to grow in both traditional and new markets.
The E.U. also predicts that production among its members will continue to steadily increase, growing by about 1.1 percent over the course of the next decade.
The E.U.’s olive oil production is expected to further intensify with an increase in production capacity. Domestic consumption could grow, mainly outside of the main producing countries.
“The E.U.’s olive oil production is expected to further intensify with an increase in production capacity. Domestic consumption could grow, mainly outside of the main producing countries,” the report said. “At global level, strong demand in traditional and new markets should lead to an increase in E.U. exports.”
These predictions were laid out in the E.U.‘s 2019 to 2030 agricultural outlook report published earlier this month.See more: News from the European Union
The E.U. mainly attributes increasing production to the shift from traditional to super-intensive olive groves on the Iberian Peninsula as well as the modernization of irrigation systems and improvement of agronomic conditions of the trees.
The report also cites an increasing consumer preference for early-harvest olive oils and specialized organic and monovarietal oils as part of what is driving this production increase.
Overall, olive oil production in the E.U. is expected to increase by 400,000 tons over the course of the next decade. The majority of this growth is predicted to take place in Portugal, which, according to a separate report, may be the third-largest producer of olive oil globally by 2030.
The report also addresses one of the upcoming challenges for Europe’s olive oil sector, which is the issue of farm succession.
“Farm succession will remain a challenge, particularly in Italy and Greece, where most farms are smaller than five hectares (12.4 acres), and where around 70 percent of the owners of these small farms are 55 years and older,” the report said.
In terms of consumption, the report predicts that the majority of growth in demand will come from outside of the main producing countries. The E.U. cites changing in eating habits as well as the younger generations’ concern about their health and the environment as two of the reasons behind this growth.
Non-producing countries will make up 32 percent of total consumption in the trading bloc.
The trend of declining olive oil consumption in producing countries is also expected to slow down slightly.
The E.U. attributes both of these trends to successful awareness campaigns as well as the incorporation of olive oil into modern lifestyles, such as its use in various food services.
Along with increasing consumption, the E.U. also anticipates that exports to the rest of the world will increase by 3.3 percent per year between 2019 and 2030. The report suggests that exports are likely to increase in some existing markets as well as in new markets.
This optimism comes in spite of the uncertainty of future relations with the United Kingdom – one of the largest domestic markets for olive oil in the E.U. – which is set to begin the process of leaving the trading bloc on January 31.
Further complications could come from the United States, which is in the process of reviewing whether it will increase existing tariffs on Spanish olive oil imports and apply new tariffs on other E.U. olive oil imports as a result of the ruling in its favor at the World Trade Organization in October.
In spite of the prediction for increasing production, the E.U. expects exports and consumption to grow at a much faster rate as the decade progresses.
According to current market data, the E.U. has 829,000 tons of olive oil stocks. This near-record high figure (stocks were slightly higher in 2018) has been partially responsible for driving down olive oil prices in countries such as Spain, which has the vast majority of the stocks.
The report predicts that olive oil stocks will have decreased to 550,000 tons by 2030. Over the same period of time exports are predicted to steadily increase to 860,000 tons (they currently sit at 610,000 tons) and imports will decrease, but not dramatically (these change quite drastically depending on the harvests in E.U. countries).