Olive Oil Production in Europe Expected to Reach 1.5M Tons in 2023/24

Summary

The European Union pre­dicts that olive oil pro­duc­tion in the 2023/24 crop year will be 1.5 mil­lion tons, impact­ing prices due to below-aver­age har­vests and mar­ket scarcity. This is expected to result in reduced con­sump­tion in the E.U., with prices reach­ing record highs in major olive oil-pro­duc­ing regions.

European Union offi­cials esti­mate that the nine pro­duc­ing coun­tries of the 27-mem­ber bloc will yield 1.5 mil­lion tons of olive oil in the 2023/24 crop year.

As a result of another below-aver­age har­vest and cur­rent mar­ket scarcity, olive oil prices are likely to remain high. According to the European Commission’s short-term agri­cul­tural out­look report, these con­di­tions will sig­nif­i­cantly impact olive oil con­sump­tion in Europe.

If the E.U.’s esti­mate comes to fruition, pro­duc­tion in the 2023/24 crop year would be 9 per­cent above the his­tor­i­cal low of the pre­vi­ous sea­son, when 1.384 mil­lion tons were pro­duced. Between 2017/18 and 2021/22, the E.U. pro­duced an aver­age of 2.13 mil­lion tons of olive oil annu­ally.

Officials in Brussels noted how three of the bloc’s four major olive oil-pro­duc­ing coun­tries faced chal­leng­ing har­vests, with Italy being the excep­tion.

Italian groves ben­e­fited from abun­dant rain­fall in the spring, which neg­a­tively impacted flow­er­ing in sev­eral regions but helped sus­tain olive pro­duc­tion in the coun­try’s south. Meanwhile, grow­ers in Spain, Portugal and Greece faced a hot and dry spring.

Summer did not go much bet­ter in Spain and Portugal, as the effects of some rain­fall were cur­tailed by heat­waves and con­di­tions favor­ing olive fruit fly and pest infec­tions.

The E.U. expects Greece’s olive oil yield to drop 20 per­cent in the 2023/24 crop year as the coun­try enters an ​‘off-year’ in the alter­nate bear­ing cycle of the olive trees.

On top of reduced pro­duc­tion, the E.U. also faces low olive oil stocks. According to Brussels, the new crop year began with only 307,000 tons. By com­par­i­son, the E.U. started the pre­vi­ous one with 670,000 tons of olive oil.

The E.U. sup­ply is expected to be par­tially sus­tained by 160,000 tons of olive oil imports, a vol­ume highly depen­dent on Tunisia, where olive oil pro­duc­tion is expected to rebound.

Even so, the E.U. pre­dicts that the olive oil mar­ket will remain tight, result­ing in ris­ing prices well into next spring.

According to the report, extra vir­gin olive oil prices in Jaén, Spain, the world’s largest olive oil-pro­duc­ing region, reached €820 per 100 kilo­grams at the end of August, the high­est value ever recorded and nearly three times higher than the aver­age of the last five years.

Prices for vir­gin olive oil and lam­pante olive oil have fol­lowed a sim­i­lar trend.

Rising olive oil prices paired with lower pro­duc­tion are expected to impact E.U. olive oil exports in the upcom­ing months neg­a­tively.

According to the report, exports have dropped 40 per­cent between April and June 2023 com­pared to the pre­vi­ous year, while ship­ments abroad between October 2022 and June 2023 fell by 23 per­cent.

According to Brussels, record-high olive oil prices are also impact­ing con­sump­tion in E.U.’s non-pro­duc­ing coun­tries, which are expected to drop to 280,000 tons in the cur­rent crop year from 290,000 tons in the pre­vi­ous one.

In the four main pro­duc­ing coun­tries, con­sump­tion is expected to decrease from 1.02 mil­lion tons in 2022/23 to 950,000 tons in 2023/24. Overall, E.U. olive oil con­sump­tion is expected to drop by six per­cent.