Although Spanish olive oil production is expected to increase to 1.2 million metric tons for the marketing year (MY) 2015/2016 from the 836,000 metric tons in MY 2014/2015, a recent report published by the USDA under the Global Agricultural Information Network estimates that it will be insufficient to make up for the depleted stores of the previous year.
Spain will most likely begin its 2015/2016 marketing year with “historically low stock levels,” according to the report.
The 2014/2015 campaign saw poor olive oil yields in Spain, down to 836,000 metric tons after record levels of 1.7 million metric tons produced in MY2013/2014. Poor flowering and fruit setting due to unfavorable conditions in April and May, accompanied by a delayed harvest and fruit fly infestation played a role in decreasing olive oil yield in MY2014/2015.
However, Spain maintained normal strong exports of olive oil. To continue in its role as the largest olive oil exporter in the world, Spain dipped into its stock of olive oil and increased imports of olive oil from non-EU countries such as Tunisia and Morocco to meet international and national demand.
This has resulted in record low levels of olive oil stocks in Spain. According to the Spanish Agency for Food Information and Control (AICA), olive oil stocks for MY2015/2016 are 64 percent less than the levels of MY2014/2015 and about 47 percent less than the average of the last ten years.
While olive oil production in MY2015/2016 is expected to be higher than that produced in the previous marketing year, it is not sufficient to recoup depleted stocks.
In an effort to stabilize the olive oil sector, the Common Agricultural Policy (CAP) is initiating new reforms such as storage by private operators and increasing bargaining power and fair distribution along the supply chain.
Another measure awaiting final approval from the European Commission that would help stabilize olive oil stocks is to allow Tunisia to supply an additional annual quota of 35,000 metric tons of olive oil duty-free to the European Union until the end of 2017 in addition to the current 56,700 metric tons.