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Italian olive oil pro­duc­tion in the 2019/20 crop year amounted to nearly 365,000 tons, a higher total than pre­vi­ously expected, accord­ing to the lat­est report by the Institute of Services for the Agricultural and Food Market (Ismea).

Based on dec­la­ra­tions that were pro­vided by mills up until mid-March, when har­vest­ing oper­a­tions were con­cluded, the 2019 yield is more than dou­ble the vol­ume of the pre­vi­ous year.

“The national out­put has returned to good lev­els and, even though it is far from being con­sid­ered abun­dant, the growth fig­ures are rel­e­vant,” Tiziana Sarnari, the Ismea mar­ket ana­lyst, told Olive Oil Times.

“On the basis of the data ana­lyzed, the penin­sula can be divided into two parts: the north with dras­tic reduc­tions that in some cases have led to almost zero vol­ume, and the south with increases in all regions, some of which have dou­bled or tripled the poor yield of the pre­vi­ous years.”

Puglia, which usu­ally accounts for half of national pro­duc­tion but suf­fered from severe frosts last year, recov­ered to the nor­mal out­put and recorded 208,755 tons.

In Calabria, vol­umes more than tripled (+284 per­cent) com­pared to the pre­vi­ous crop year, exceed­ing the aver­age of the last four years by a large mar­gin. Meanwhile, pro­duc­tion in Sicily returned to nor­mal lev­els, with 34,000 tons.

Basilicata also reg­is­tered a huge increase in pro­duc­tion (+412 per­cent). Large increases were also expe­ri­enced in Campania and Sardinia, while more mod­est gains have been recorded in Lazio, Marche, Abruzzo, and Molise.

On the other hand, Tuscany, Umbria, Emilia Romagna and Friuli Venezia Giulia all expe­ri­enced pro­duc­tion decreases in 2019.

However, the sharpest decline was recorded in Trentino Alto Adige (-98 per­cent), fol­lowed closely by Lombardy (-91.7 per­cent), Veneto (-91.2 per­cent), Piedmont (-88 per­cent) and Liguria (-71.6 per­cent) – areas which account for a small per­cent­age of the national pro­duc­tion.

In response to these data, Italian olive oil prices in the first quar­ter of 2020 fol­lowed a down­ward trend, decreas­ing by 44 per­cent com­pared with the same period last year (falling from €5.61/$6.08 per kilo­gram to €3.10/$3.36).

“The abun­dant stocks at the begin­ning of the cam­paign, espe­cially in Spain, has dri­ven down inter­na­tional prices,” Sarnari said, point­ing out that in Italy the decline had inten­si­fied in early sum­mer and per­sisted until the autumn, with the open­ing of the mills and the expec­ta­tion of a rea­son­able pro­duc­tion.

According to the report, Spain also reg­is­tered a 21 per­cent drop in prices, which fell to €2.13 ($2.31) per kilo­gram, com­pared to €2.68 ($2.91) at the same time last year.

“This decrease in prices, which were already par­tic­u­larly attrac­tive, has allowed bot­tling com­pa­nies to buy at afford­able rates both in Italy and abroad, and so far, despite the cur­rent sit­u­a­tion due to the Covid-19 cri­sis, they do not seem to have sup­ply prob­lems,” the Ismea ana­lyst said.

The stocks were, there­fore, effec­tive in off­set­ting the slight decrease in world olive oil pro­duc­tion.

According to the lat­est esti­mates by the International Olive Council, Spain suf­fered a con­sid­er­able decline in pro­duc­tion, record­ing a 35 per­cent decrease com­pared with 2018.

On the other hand, Greece expe­ri­enced an increase, although pro­duc­tion was lower than expected at the begin­ning of the har­vest. Tunisia and Turkey also expe­ri­enced pro­duc­tion increases.

“Over the last two months, as mills grad­u­ally ended their activ­ity, the mar­ket has gone through a more reflec­tive phase, in which bot­tling com­pa­nies are in no hurry to buy, while the pro­duc­ers wait for more favor­able prices,” Sarnari said.

She added that pri­vate stor­age aid is also hav­ing an impact on prices.

Moreover, based on data received from the Italian National Institute of Statistics (Istat), Ismea indi­cates that for 2019, Italian olive oil and pomace imports have exceeded 600,000 tons at an expen­di­ture of €1.4 bil­lion ($1.52 bil­lion).

While this fig­ure rep­re­sents a 9.5 per­cent increase in vol­ume, it is also a 13 per­cent decrease in spend­ing, due to the reduc­tion in inter­na­tional prices.

Exports also increased slightly in vol­ume, reach­ing 339,000 tons, but only amount­ing to €1.37 bil­lion ($1.48 bil­lion) in value, a decrease of 8.5 per­cent.

The abun­dant avail­abil­ity of Spanish olive oil helped to meet grow­ing Italian demand as olive oil con­sump­tion also grew by 26 per­cent.

Meanwhile, imports from Greece and Tunisia decreased. Exports to the United States remained sta­ble, while those to Germany, France and the United Kingdom grew.

“We have to wait a few weeks, when the sit­u­a­tion con­cern­ing the health cri­sis will be more defined in Italy, Spain, Greece and Tunisia,” Sarnari said, adding that in the com­ing months pro­duc­ers and exporters would have to face the uncer­tainty of the U.S. tar­iffs and the imple­men­ta­tion of Brexit.

“Now, how­ever, the issue of the global health cri­sis still remains, and the time and ways to get back to nor­mal will be cru­cial to under­stand the devel­op­ment of trade,” Sarnari con­cluded.

• Ismea