E.U. Anticipates Increase in Consumption and Exports by 2030

Summary

The European Union pre­dicts that olive oil con­sump­tion will increase in non-pro­duc­ing coun­tries, while pro­duc­tion within the E.U. is expected to steadily grow by about 1.1 per­cent over the next decade, with the major­ity of this growth pre­dicted to occur in Portugal. The E.U. also antic­i­pates that exports of olive oil to the rest of the world will increase by 3.3 per­cent per year between 2019 and 2030, despite poten­tial chal­lenges such as farm suc­ces­sion issues and uncer­tain­ties sur­round­ing future rela­tions with the United Kingdom and the United States.

The European Union antic­i­pates olive oil con­sump­tion to increase in non-pro­duc­ing coun­tries, both within the 28-mem­ber trad­ing bloc and the rest of the world.

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 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.

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.

Overall, olive oil con­sump­tion in non-pro­duc­ing E.U. mem­ber states is expected to increase by eight per­cent­age points, even as Europe’s pop­u­la­tion is pro­jected to decline dur­ing the period.

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).

• E.U. Agricultural Outlook 2019 to 2030


• European Union