Olive Oil Production to Fall 25%, European Commission Predicts

All of Europe’s main producing countries, with the exception of Greece, are expecting significant production drops. However, some believe the forecast is too pessimistic.

By Paolo DeAndreis
Oct. 17, 2022 18:56 UTC

Olive oil pro­duc­tion in the European Union is expected to fall to 1.7 mil­lion tons in the 2022/23 crop year, accord­ing to esti­mates pub­lished in the bloc’s short-term agri­cul­tural out­look report.

This year’s olive oil yield rep­re­sents a 25 per­cent drop com­pared to last year and is 20 per­cent below the rolling five-year aver­age.

The E.U. pro­jec­tions about the drop in European olive oil pro­duc­tion seem way too neg­a­tive when com­pared to our esti­mates.- Anna Cane, pres­i­dent, Assitol olive oil group

In Spain and Italy, pro­duc­tion is expected to fall by 30 per­cent. In Portugal, offi­cials noted that the irri­gated super-high-den­sity olive groves of Alentejo were less affected by the Iberian Peninsula’s ongo­ing drought. Nevertheless, pro­duc­tion in the coun­try is expected to fall 40 per­cent com­pared to last year.

According to the E.U. pro­jec­tions, olive oil vol­umes will fall in all pro­duc­ing coun­tries, with the notable excep­tion of Greece.

See Also:2022 Harvest Updates

The drought that enveloped sig­nif­i­cant areas in Portugal, Spain, France, Italy and por­tions of North Africa since last win­ter did not harm the main Greek pro­duc­tion areas,” Vasilios Frantzolas, an olive oil taster and qual­ity con­sul­tant, told Olive Oil Times.

He added that Greece expe­ri­enced sim­i­lar prob­lems with drought and wild­fires in the 2021/22 crop year.

In August this year, instead, we had gen­er­ally mod­er­ate tem­per­a­tures,” Frantzolas said. Only in a few areas, some higher tem­per­a­tures might have impacted pro­duc­tion by dam­ag­ing the flow­er­ing.”

The olive oil yield in Greece is con­sid­ered abun­dant when it reaches 300,000 tons,” he added. Talking with olive grow­ers and millers in sev­eral areas, the esti­mate for the cur­rent sea­son is between 270,000 and 285,000 tons of olive oil, with an esti­mated 100,000 com­ing from Crete, which pro­duced approx­i­mately 60,000 tons last year.”

Away from Greece, south­ern and west­ern Europe faced one of the hottest sum­mers on record, accom­pa­nied by heat­waves and arid weather, which stunted the devel­op­ment of the olive trees at crit­i­cal moments.

The com­bined drought indi­ca­tor of the E.U. Joint Research Center reported that 33 per­cent of Europe faced a soil mois­ture deficit in September. Meanwhile, 26 per­cent of the con­ti­nent is in a state of alert due to crops and veg­e­ta­tion show­ing severe signs of stress.

The cen­ter empha­sized how the extra­or­di­nary sum­mer con­di­tions pushed many national and regional author­i­ties to restrict water use for irri­ga­tion. In some regions, very low reser­voirs lev­els made field irri­ga­tion impos­si­ble,” E.U. offi­cials wrote.

Along with olive devel­op­ment, these severe con­di­tions also impacted sta­ple sum­mer crops, such as grain maize, soy­beans and sun­flow­ers.

The main olive oil-pro­duc­ing coun­tries in the European Union are also some of the continent’s largest olive oil con­sumers. According to the report, lower lev­els of olive oil pro­duc­tion will likely be sup­ple­mented by increased imports.

Additionally, lower pro­duc­tion is among the fac­tors fuel­ing ris­ing olive oil prices and may result in a decrease in demand in some price-sen­si­tive for­eign mar­kets. E.U. offi­cials said exports could fall by 10 per­cent.

The offi­cials added that 625,000 tons of end­ing stocks from pre­vi­ous har­vests might not be enough to relieve pres­sure on prices at the ori­gin.

However, Frantzolas said demand for olive oil and, there­fore, prices also would depend on other edi­ble oil prices.

If those prices go down, that will trim the rise in olive oil prices,” Frantzolas said, as some con­sumers would ditch olive oil for cheaper alter­na­tives. As a result, he esti­mated that E.U. olive oil con­sump­tion could fall by up to 6 per­cent.

Frantzolas added that devel­op­ments from the war in Ukraine would deter­mine other edi­ble oil prices. Seed oil prices could go down as Russia seems to have allowed Ukrainian ship­ments to leave the coun­try,” he said.

E.U. agri­cul­tural offi­cials agreed that increas­ing pres­sure on con­sumer bud­gets caused by infla­tion might force Europeans to limit their olive oil con­sump­tion, which they said could decline by up to 9 per­cent.

However, not every­one agrees with the analy­sis of the E.U. agri­cul­tural out­look report, with some say­ing it seemed a bit too pes­simistic.

The E.U. pro­jec­tions about the drop in European olive oil pro­duc­tion seem way too neg­a­tive when com­pared to our esti­mates,” Anna Cane, pres­i­dent of the Italian Association of the Edible Oil Industry’s (Assitol) olive oil group, told Olive Oil Times.

She acknowl­edged that many pro­duc­ing coun­tries have entered an off year’ in the nat­ural alter­nate bear­ing cycle of the olive tree and the sec­tor had to cope with months of extreme cli­mate, such as the hot weather since May and the floods of August.”

Recovering from the dam­ages caused by the hot sum­mer will not be easy, but we do not believe that a 25 per­cent drop esti­mate is jus­ti­fied,” she added. Instead, Assitol expects Italian olive oil pro­duc­tion to reach 250,000 tons, 20 per­cent below last year’s yield as opposed to the 30 per­cent esti­mated by the E.U.

Away from pro­duc­tion, both Frantzolas and Cane warned that the ris­ing costs of glass and other pack­ag­ing mate­ri­als would fur­ther com­pli­cate the har­vest.

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