EU Report Predicts Rise in Production While Consumption Slips

A new report released by the European Commission out­lines a medium-term out­look of var­i­ous agri­cul­tural and com­mod­ity mar­kets within the EU Member States from 2018 until 2030. The report focuses on pro­duc­tion, con­sump­tion, and pos­si­ble export oppor­tu­ni­ties.

Production is expected to increase in the olive oil sec­tor, ben­e­fit­ting from the planned struc­tural improve­ments in the main olive oil-pro­duc­ing European coun­tries, and will sat­isfy the increas­ing global demand for olive oil. However, con­sump­tion in the main coun­tries is expected to decline and be sig­nif­i­cantly lower by 2030 com­pared to present day.

Four coun­tries — Spain, Italy, Greece, and Portugal — account for 99 per­cent of the total olive oil pro­duc­tion in the EU, and 790,000 olive grow­ers were active in all the EU olive oil pro­duc­ing ter­ri­to­ries in 2016. The total yield for the cur­rent 2018/19 har­vest­ing sea­son is expected to reach 2.3 mil­lion tons of olive oil.

The report pre­dicts an increased pro­duc­tion and grow­ing capac­ity in the EU in the com­ing years, mainly due to changes and improve­ments in cul­ti­va­tion meth­ods and agro­nomic prac­tices, and the mod­ern­iza­tion of the machin­ery used.

Growers in Spain and Portugal are con­tin­u­ing to invest in irri­ga­tion sys­tems and new har­vest­ing meth­ods have been intro­duced in Italy. In its the milling indus­try, Portugal is also replac­ing its old pro­cess­ing equip­ment with new arti­cles.

This will fur­ther strengthen the EU’s export posi­tion and capa­bil­i­ties, the report stated, espe­cially now that non-EU coun­tries, such as Turkey, are increas­ing their olive oil yield year-by-year.

In terms of con­sump­tion, a pro­gres­sive reduc­tion is antic­i­pated in the four main pro­duc­ing coun­tries of the EU due to changes in lifestyle and the increased price of olive oil com­pared to pre­vi­ous years. By 2030, the per capita con­sump­tion in the big four is expected to be at 9.5 kilo­grams on aver­age.

On the other hand, con­sump­tion in the rest of the EU will likely increase and com­pen­sate for the loss in the lead­ing pro­duc­ers. In 2030, about 33 per­cent of the EU olive oil will be con­sumed out­side the big four, accord­ing to the report, com­pared to 23 per­cent in the 2015 to 2017 time period.

The mar­ket in the United Kingdom was ref­er­enced sep­a­rately in the report due to the forth­com­ing Brexit in March, and the UK was acknowl­edged as the sec­ond larger pur­chaser of EU olive oil after the U.S., with 64,000 tons (includ­ing pomace oil) being imported in 2016 and 2017 on aver­age.

A European Commission Agricultural and Rural Development rep­re­sen­ta­tive told Olive Oil Times that global con­sump­tion of olive oil is highly depen­dent on the pro­duc­tion.

“At a global level all the pro­duced olive oil is con­sumed and vari­a­tions in con­sump­tion fol­low closely vari­a­tions in pro­duc­tion,” a spokesper­son for the Commission said.

“The con­sump­tion of olive oil in the main pro­duc­ing coun­tries has decreased over the last years,” the spokesper­son added. ​“Mainly because of the reduc­tion of the pur­chas­ing power since the finan­cial cri­sis in a con­text of prices rel­a­tively high for olive oil in rela­tion to the pre­vi­ous decade. Over the same period, demand for olive oil has increased in the rest of the EU and at a global level, and so did the exports of EU olive oil.”

The spokesper­son also explained that the pro­jec­tions for olive oil con­sump­tion the report con­tains were made tak­ing into account this slightly decreas­ing trend the pre­vi­ous years.

“However, con­sump­tion is based on numer­ous dri­vers (posi­tion of olive oil in edi­ble oils, health ben­e­fits, Mediterranean diet etc.), use and con­sump­tion habits changes (house­hold con­sump­tion, food­ser­vice, lifestyles), coun­try of ori­gin, brand­ing, and pro­mo­tion, that require to be ana­lyzed,” the spokesper­son said.

As far as the UK is con­cerned, the Commission expects it to remain a big importer of EU olive oil given the promi­nent posi­tion of the EU pro­duc­tion in the world mar­ket and the lim­ited alter­na­tive sup­ply sources avail­able.

• EU medium-term out­look report


• Euromonitor