Global Olive Oil Production Predicted to Rebound

Summary

Global olive oil pro­duc­tion is expected to rebound in the upcom­ing 2023/24 crop year, with the USDA fore­cast­ing a 24-per­cent increase to reach 3.20 mil­lion tons, largely due to a sig­nif­i­cant rebound in the European Union. Additionally, the USDA antic­i­pates that global olive oil con­sump­tion will also rebound, with exports expected to grow by 7 per­cent, led by the E.U., while U.S. imports are fore­casted to stay unchanged at 400,000 tons.

According to pre­lim­i­nary esti­mates from the United States Department of Agriculture, global olive oil pro­duc­tion is expected to rebound in the upcom­ing 2023/24 crop year.

USDA econ­o­mists fore­cast pro­duc­tion to reach 3.20 mil­lion tons in 2023/24, a 24-per­cent increase com­pared to last year’s his­tor­i­cally poor har­vest and just about level with the five-year aver­age of 3.14 mil­lion tons.

According to the USDA, a sig­nif­i­cant rebound in the European Union, the world’s largest olive oil-pro­duc­ing entity, will be largely respon­si­ble for ris­ing global yields.

USDA econ­o­mists esti­mate that the E.U. will pro­duce 2.03 mil­lion tons in 2023/24, up from 1.50 mil­lion tons in 2022/23 and slightly exceed­ing the five-year aver­age of 2.00 mil­lion tons.

While the antic­i­pated recov­ery will depend heav­ily on flow­er­ing con­di­tions and pre­cip­i­ta­tion lev­els in the spring and autumn, ris­ing pro­duc­tion in the bloc will likely be fueled by many groves enter­ing an ​‘on-year’ in the olive trees’ nat­ural alter­nate bear­ing cycle and new plan­ta­tions enter­ing pro­duc­tion.

USDA econ­o­mists do not pub­lish coun­try-spe­cific data for the E.U. fore­cast.

Production is also pre­dicted to rebound in Tunisia, ris­ing to an esti­mated 250,000 tons in 2023/24 from 180,000 tons in 2022/23. The esti­mated har­vest also would be almost 10 per­cent above the five-year aver­age of 228,000 tons.

The USDA said expec­ta­tions of ris­ing pro­duc­tion in the North African coun­try were attrib­uted to many pro­duc­ers enter­ing an ​‘on-year’ and indus­try sources.

While pro­duc­tion is expected to rise in the E.U. and Tunisia, the USDA fore­casts that the yield will fall to 280,000 tons in Turkey in 2023/24, down from the record-high 421,000 tons of last year but still nearly 14 per­cent above the five-year aver­age of 246,400 tons.

The USDA expects pro­duc­tion to fall in the com­ing crop year as many pro­duc­ers enter an ​‘off-year,’ but projects that pro­duc­tion will rise in the long term due to con­tin­ued gov­ern­ment efforts to plant more trees and pro­mote more effi­cient agri­cul­tural prac­tices, includ­ing mech­a­nized har­vests and drip irri­ga­tion.

“It is quite the chal­lenge to pre­pare a fore­cast for olive oil at this point in time, espe­cially given the nature of the crop,” USDA econ­o­mist Gretchen Kuck told Olive Oil Times.

“We use a com­bi­na­tion of mar­ket intel­li­gence, cycli­cal and his­tor­i­cal trend data and assump­tions about the weather to come to our pro­duc­tion fore­cast for olive oil,” she added. ​“As the mar­ket­ing year pro­gresses, we will con­tinue to use trade data, mar­ket news and offi­cial sta­tis­tics to cal­i­brate our num­bers.”

Along with improved pro­duc­tion, the USDA fore­casts that global olive oil con­sump­tion will also rebound to 2.9 mil­lion tons as ​“low car­ryin from the cur­rent year lim­its total sup­plies in 2023/24.”

However, the department’s econ­o­mists antic­i­pate that con­sump­tion will recover more slowly in price-sen­si­tive coun­tries in the Middle East and North Africa, which con­tinue to grap­ple with high food infla­tion and more prof­itable export prices.

The USDA expects global exports to grow by 7 per­cent due to the pro­duc­tion rebound, and olive oil stocks will also recover from last year’s low lev­els.

The E.U. is expected to lead the way, with exports fore­cast to rise to 750,000 tons, up from 588,500 tons in 2022/23.

Meanwhile, exports in Turkey are expected to fall from their record-high lev­els of 2022/23 to 160,000 tons in 2023/24. Still, Turkish exports are expected to remain well above the five-year aver­age due to the upward trend in pro­duc­tion com­pared to sta­ble con­sump­tion.

The USDA also expects U.S. imports to stay unchanged at 400,000 tons, with the U.S. remain­ing the world’s largest importer, cap­tur­ing about one-third of the global olive oil trade.

“Our con­sump­tion and trade fore­casts for veg­etable oils look at total sup­plies, sub­sti­tu­tion options, pric­ing and con­sumer pref­er­ence for the entire world, region and each indi­vid­ual coun­try,” Kuck said.

• USDA