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European Union olive oil export vol­umes are on pace to reach a new record in the 2019/20 crop year, accord­ing to the Director General of Agriculture and Rural Development’s short-term mar­ket out­look report for autumn 2020.

From October 2019 through July 2020, exports grew sig­nif­i­cantly and are on pace to reach 820,000 tons. According to data from the International Olive Council, the pre­vi­ous record was achieved in the 2018/19 crop year, when the bloc exported 647,600 tons.

Export vol­umes increased to every sin­gle one of the E.U.’s main olive oil des­ti­na­tions, includ­ing a 32 per­cent increase in ship­ments to both Brazil and the United Kingdom (which for­mally left the E.U. on January 31, 2020), a 16 per­cent increase to the United States and three per­cent increases to both Japan and China.

Combined, these five coun­tries account for about 70 per­cent of all the olive oil exports from the 27-mem­ber trad­ing bloc.

However, per­sis­tently low olive oil prices through­out the E.U. mean that the value of these exports did not match the vol­ume. The value of olive oil exports to the United States fell by about three per­cent and dropped by 10 per­cent to both Japan and China in 2019/20.

Along with exports, olive oil imports could also reach a his­toric high, with the E.U. expected to bring in 240,000 tons in the 2019/20 crop year. The pre­vi­ous import record stood at 231,800 tons in the 2003/04 crop year.

Almost 90 per­cent of these imports are expected to come from Tunisia, which is expect­ing to achieve record exports in 2019/20.

“These increas­ing flows are dri­ven by both E.U. pro­cess­ing and re-export­ing needs, which helps to sus­tain busi­ness rela­tions in cer­tain export des­ti­na­tions where some E.U. exports are restricted due to retal­i­a­tion tar­iffs,” the authors of the report wrote, refer­ring to the impo­si­tion of a 25 per­cent tar­iff by the United States on pack­aged Spanish olive oil imports in October 2019.

While both exports and imports are expected to soar as the crop year comes to a close, olive oil con­sump­tion is antic­i­pated to increase by three per­cent in the E.U.

The increase is mostly fueled by ​“strong con­sump­tion by house­holds,” which the report attrib­uted to lock­downs imposed by most of Europe to curb the spread of the Covid-19 pan­demic and comes in spite of reduced demand from the restau­rant and hos­pi­tal­ity sec­tors.

“Together with an antic­i­pated export growth, it should con­tribute to a stock reduc­tion of 20 per­cent,” the report said.

Producers across the sec­tor have long held that ris­ing con­sump­tion and exports paired with a decrease in the mas­sive glut of olive oil stocks will help prices recover across the bloc.

Looking ahead to the 2020/21 crop year, the report pre­dicts that olive oil pro­duc­tion in the E.U. will reach 2.2 mil­lion tons, a 17 per­cent increase com­pared with the pre­vi­ous crop year.

Spain is expected to lead the way with 1.55 mil­lion tons, fol­lowed by Italy and Greece with an esti­mated 290,000 tons and 280,000 tons, respec­tively. Meanwhile, pro­duc­tion in Portugal is esti­mated to reach 100,000 tons.

Due to the record-high exports of the cur­rent crop year and exist­ing stocks in many of the world’s largest olive oil con­sum­ing nations, exports are expected to dip again in 2020/21. The report fore­casts that the E.U. will ship 790,000 tons abroad. As a result, imports are also expected to fall.

However, olive oil con­sump­tion is expected to con­tinue increas­ing. The report fore­casts a 3.5 per­cent rise in con­sump­tion in 2020/21, fueled both by the con­tin­u­ing growth of domes­tic demand paired with the slow recov­ery of the restau­rant and hos­pi­tal­ity sec­tor.