European Union Olive Oil Production Set to Grow by One-Third

Summary

The European Commission pre­dicts that olive oil pro­duc­tion in the European Union will increase by 32 per­cent for the 2024/25 sea­son, with Spain expected to lead the way, while Italy’s pro­duc­tion is fore­casted to decline sig­nif­i­cantly. Despite high prices impact­ing exports and con­sump­tion, the E.U. antic­i­pates that over­all con­sump­tion could rebound by as much as seven per­cent if prices con­tinue to decrease.

The European Commission’s lat­est pro­jec­tions sug­gest that the 2024/25 crop year will return to more typ­i­cal yields fol­low­ing two chal­leng­ing years.

According to Brussels’ recently pub­lished agri­cul­tural short-term out­look, olive oil pro­duc­tion across the European Union is expected to increase by 32 per­cent com­pared to last sea­son.

This rise will bring the esti­mated total yield for the upcom­ing sea­son to two mil­lion tons. In con­trast, 2023/24 saw pro­duc­tion drop to 1.53 mil­lion tons, with 1.39 mil­lion tons recorded in 2022/23.

Spain is set to be the most sig­nif­i­cant con­trib­u­tor, with a fore­casted yield of 1.3 mil­lion tons, though experts in the coun­try said pro­duc­tion may reach up to 1.45 mil­lion tons.

Meanwhile, Portugal and Greece are expected to increase olive oil pro­duc­tion.

Conversely, Italy is expected to face a sig­nif­i­cant down­turn, with its pro­duc­tion fore­casted to drop by one-third.

Starting stock lev­els for 2023/24 fell to 410,000 tons, down from 671,000 tons in the pre­vi­ous year. As the new sea­son begins, stock lev­els have dropped to 350,000 tons.

Nonetheless, the E.U. antic­i­pates that stock­piles will recover to more than 600,000 tons by the sea­son’s end, align­ing with aver­age his­tor­i­cal lev­els.

The expected surge in olive oil avail­abil­ity is likely to influ­ence prices.

Olive oil prices have only slightly decreased since their peak in January 2024, reflect­ing expec­ta­tions for a boun­ti­ful har­vest.

For exam­ple, accord­ing to the E.U.‘s Agriculture and Rural Development Department, extra vir­gin olive oil prices in Spain fell from €9.03 per kilo­gram to €7.43.

Still, this remains sig­nif­i­cantly higher than the five-year aver­age of €5.05 per kilo­gram.

High prices have also impacted exports. E.U. olive oil exports started to decline dur­ing 2022/23, show­ing only slight signs of recov­ery by the end of 2023.

Between October 2023 and July 2024, exports were down 1.3 per­cent com­pared to the pre­vi­ous sea­son and 26 per­cent lower than in 2021/22. However, a ten per­cent rise in exports is antic­i­pated for the new sea­son.

Imports, on the other hand, are expected to drop by seven per­cent.

Despite this, solid yields and com­pet­i­tive prices in Tunisia and Turkey could shift the out­look as the sea­son pro­gresses. In the last sea­son, E.U. olive oil imports rose by 30 per­cent, with 62 per­cent com­ing from Tunisia and 14 per­cent from Turkey.

The short-term out­look report also high­lighted con­sid­er­able uncer­tainty in the mar­ket, par­tic­u­larly regard­ing the rate of price decline and its effect on con­sumers.

Some con­sumers have either reduced their use of olive oil or stopped pur­chas­ing it entirely due to high prices.

According to the E.U., with prices still ele­vated, olive oil con­sump­tion is expected to drop by one per­cent fur­ther, leav­ing it 23 per­cent lower than in 2021/22.

However, if prices at ori­gin con­tinue to decrease and those reduc­tions are passed on to con­sumers, over­all con­sump­tion in the E.U. could rebound by as much as seven per­cent.

E.U. data show that con­sump­tion in Spain, Italy, Portugal and Greece could almost reach 987,000 tons in 2024/25, up from the 923,000 tons of the pre­vi­ous sea­son.

• E.U. Agriculture and Rural Development Department