European Commission Predicts an Upward Trend in Production After This Year's Setback

Production and exports are expected to surge in Spain and Portugal. Italy will see modest production gains and fewer imports. Production in Greece is projected to fall.

Valpaços Cooperative, Portugal (OOT Archive)
By Daniel Dawson
Dec. 16, 2021 09:34 UTC
Valpaços Cooperative, Portugal (OOT Archive)

Olive oil pro­duc­tion in the European Union is expected to reach 1.98 mil­lion tons in the 2021/22 crop year, accord­ing to pre­lim­i­nary esti­mates from the European Commission.

Unsurprisingly, Spain is expected to lead the way with 1.3 mil­lion tons of pro­duc­tion, fol­lowed by Italy (315,000 tons), Greece (235,000 tons), Portugal (120,000 tons), Cyprus (6,100 tons), France (4,605 tons), Croatia (3,044 tons) and Slovenia (280 tons).

Water scarcity and com­pe­ti­tion with other uses could remain a chal­lenge for future yield devel­op­ment which is due to increase by one per­cent per year until 2031.- Researchers, European Commission

Updated last month, the com­mis­sion expects this year’s pro­duc­tion will be sig­nif­i­cantly lower than the 2.23 mil­lion tons pro­duced in the 2020/21 crop year and five per­cent below the rolling five-year aver­age.

See Also:2021 Harvest Updates

In a sep­a­rate report, the com­mis­sion struck a more opti­mistic tone about the future, expect­ing aver­age annual olive oil pro­duc­tion to rise to 2.5 mil­lion tons by 2031, a 22-per­cent increase com­pared to 2020.

According to the com­mis­sion, the growth will be fueled by improved prof­itabil­ity and value cre­ation.”

The recov­ery of E.U. olive oil prices in 2020/21 has stim­u­lated invest­ments into new olive tree plan­ta­tions,” the com­mis­sion experts wrote. Behind this, the value cre­ation in broader terms remains sig­nif­i­cant, lead­ing to improved prof­itabil­ity espe­cially in super-inten­sive (super-high-den­sity) sys­tems.”

However, the com­mis­sion also warned that cli­mate change will remain a chal­lenge for olive grow­ers and is likely to increase annual yield vari­a­tions and affect oil qual­ity.

To man­age this, resis­tant vari­eties are expected to replace cur­rent ones,” the com­mis­sion experts wrote. Meanwhile, water scarcity and com­pe­ti­tion with other uses could remain a chal­lenge for future yield devel­op­ment which is due to increase by one per­cent per year until 2031.”

Generally, the com­mis­sion expects to see het­ero­ge­neous growth across eight main olive oil-pro­duc­ing coun­tries in the 27-mem­ber bloc.

In par­tic­u­lar, annual aver­age pro­duc­tion increases in the range of 2.5 per­cent to five per­cent are expected in Spain, Italy and Portugal,” the com­mis­sion experts wrote. A lim­ited decline in pro­duc­tion is expected in Greece reflect­ing a com­bi­na­tion of a small area decline with a lag­ging yield devel­op­ment.”

The Covid-19 pan­demic has also affected the sec­tor, which was fac­ing labor short­ages in the course of 2020, espe­cially in less-mech­a­nized har­vest sys­tems,” they added. Diseases such as Xylella fas­tidiosa and weather and cli­matic events (e.g. heat waves and droughts) are the key uncer­tain­ties that could pre­vent the real­iza­tion of the expected pro­duc­tion increases.”

The com­mis­sion also antic­i­pates extra‑E.U. exports to grow along with the world’s appetite for olive oil, ris­ing to one mil­lion tons by 2031. Currently, the E.U. exports about 650,000 tons of olive oil each year.

As per capita con­sump­tion remains low in the main E.U. export des­ti­na­tions, the poten­tial for growth is high,” the com­mis­sion experts wrote. Therefore, exports will expand and take a larger share of the avail­able oil. Consumption growth in the E.U. is due to be dri­ven by non-pro­duc­ing coun­tries.”

The value cre­ation should be sus­tained via exports of bot­tled and high-qual­ity olive oil (includ­ing organic) even if some com­modi­ti­za­tion might not be pre­vented,” they added. E.U. imports could remain high, reflect­ing increas­ing pro­duc­tion in non‑E.U. coun­tries.”


Packaging plant of the cooperative of Valpaços, Portugal

The com­mis­sion esti­mates that extra‑E.U. olive oil exports will increase the most in Portugal and Spain, grow­ing by three per­cent and nine per­cent, respec­tively.

Overall, Spain is expected to remain a key player in the global olive oil mar­ket, which could use the pro­jected expan­sion of pro­duc­tion capac­i­ties to sat­isfy the emerg­ing demand from the Asia-Pacific region in par­tic­u­lar,” the com­mis­sion experts wrote. Moreover, exports of Spain and Portugal to Brazil have shown a poten­tial to grow.”


Meanwhile, Greece is also expected to see a slight dip in exports by vol­ume – though is pro­jected to main­tain a steady amount of exports by value – due to its pre­dicted pro­duc­tion decrease.

Across the Ionian Sea, Italy is expected to see its imports decline as a result of its own pro­jected pro­duc­tion increase.

While the com­mis­sion remains opti­mistic about extra‑E.U. trade, they esti­mate a slight decline in per capita olive oil con­sump­tion in the main pro­duc­ing coun­tries, with annual declines esti­mated to be between 0.4 per­cent and 0.6 per­cent.

This decline reflects the matu­rity of the mar­ket and dif­fer­ent con­sump­tion styles of younger gen­er­a­tions,” the experts wrote.

However, they antic­i­pate over­all con­sump­tion to grow as non-Mediterranean E.U. mem­ber states drive demand for olive oil. The com­mis­sion attrib­uted increas­ing aware­ness of olive oil’s health ben­e­fits and the grow­ing pop­u­lar­ity of the Mediterranean diet for both of these changes.

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