Rising Olive Oil Prices Do Not Slow Consumption in Europe

Growing demand from households and the recovery of the foodservice sector are the main drivers increasing olive oil sales in the E.U.
Jul. 25, 2022
Paolo DeAndreis

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Despite the steady rise of olive oil prices in the European Union, the lat­est data from the bloc’s short-term agri­cul­tural out­look report indi­cate that con­sump­tion also con­tin­ues to rise.

According to the report, the 2021/22 crop year is set to fin­ish with an 11-per­cent increase in olive oil con­sump­tion in the bloc’s main pro­duc­ing coun­tries. In the other E.U. mem­ber states, con­sump­tion is expected to remain at the same lev­els as in pre­vi­ous years.

The com­mis­sion cited grow­ing demand from house­holds and the recov­ery of the food­ser­vice sec­tor as the main dri­vers increas­ing olive oil sales.

See Also:Trade Group Opposes Proposed Retail Sales of Bulk Olive Oil in Europe

During much of 2020 and 2021, extra vir­gin olive oil sales to restau­rants fell sig­nif­i­cantly as coun­tries across the con­ti­nent spo­rad­i­cally plunged in and out of lock­downs.

Rising con­sump­tion in the E.U. comes on the heels of a strong 2021 har­vest, with the bloc’s main pro­duc­ers com­bin­ing to yield 2.3 mil­lion tons, an 11-per­cent increase com­pared with the pre­vi­ous year.

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The European Commission attrib­uted the pro­duc­tion increase to a 7‑percent increase in olives har­vested and a 6‑percent increase in oil yields from the olives.

In Spain, the world’s largest olive oil-pro­duc­ing coun­try by a wide mar­gin, the amount of olives har­vested dropped by 9 per­cent in the 2021/22 crop year com­pared with the pre­vi­ous one. However, the oil yield was 17-per­cent higher.

In Greece, Europe’s third-largest pro­ducer, the olive yield increased by 54 per­cent but the oil con­tent fell by 33 per­cent. The result was a 16-per­cent pro­duc­tion drop.

Meanwhile, Portuguese grow­ers and pro­duc­ers reaped 59-per­cent more olives in 2021/22 and a 21 per­cent increase in oil yields. The result was a record-break­ing har­vest of 230,000 tons of olive oil.

Along with pro­duc­tion and con­sump­tion, olive oil prices in the E.U. are also increas­ing. The com­mis­sion said the cur­rent uncer­tainty in the global edi­ble oils mar­ket due to the Russian inva­sion of Ukraine was among the rea­sons for the 16-per­cent rise in olive oil prices for con­sumers.

After an ini­tial shock caused by the Russian inva­sion to Ukraine in March, E.U. olive oil prices slightly relaxed but remain still well-above the 5‑year aver­age,” the report said.

Prices in Greece and Spain have increased sig­nif­i­cantly, ris­ing by 16 and 19 per­cent above the 5‑year aver­age.

These prices are likely to remain high due to sus­tained high input and trans­porta­tion costs, and the high prices of other oils and fats,” the report said.

In the next few months, the com­mis­sion expects olive oil prices to remain high due to a com­bi­na­tion of con­tin­ued eco­nomic uncer­tainty in the sec­tor paired with a dip in pro­duc­tion in 2022.

Spain and Italy are report­ing a sig­nif­i­cant drop in water for irri­ga­tion, which will likely lower olive yields.

Meanwhile, pro­duc­ers in Portugal antic­i­pate a slight decrease in 2022 as many of its groves enter an off-year in the nat­ural bear­ing cycle of the olive tree.

However, the sit­u­a­tion is expected to be slightly bet­ter in Greece, where pro­duc­tion is expected to rebound after a dis­ap­point­ing 2021 har­vest.


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