Global Olive Oil Production Will Hit Four-Year High, USDA Estimates

Summary

Olive oil pro­duc­tion is expected to reach a four-year high in the 2021/22 crop year, with the USDA antic­i­pat­ing a total of 3.3 mil­lion tons, dri­ven by large yields in Tunisia and the European Union. This increase in pro­duc­tion, along with record-high exports and con­sump­tion, is expected to result in low end­ing stocks and poten­tial price increases in 2022, offer­ing hope for pro­duc­ers after sev­eral years of low prices.

Olive oil pro­duc­tion is expected to reach a four-year high in the 2021/22 crop year, accord­ing to the lat­est report from the United States Department of Agriculture (USDA).

The USDA antic­i­pated that pro­duc­tion will reach 3.3 mil­lion tons, its high­est point since the 2017/18 crop year, which saw bumper har­vests in Algeria, Argentina, the European Union, Morocco and Tunisia, along with a record har­vest in Turkey.

The opti­mistic pro­duc­tion fore­cast is mostly fueled by the expec­ta­tion of large yields in Tunisia and the E.U., both of which are antic­i­pated to pro­duce 100,000 more tons in 2021/22 than they did in the cur­rent crop year.

The USDA said that it also expects olive oil exports to hit record highs in the next crop year. E.U. exports are fore­cast to grow by 25,000 tons to reach a total of one mil­lion. Meanwhile, Tunisian exports are expected to nearly dou­ble, reach­ing 225,000 tons.

Along with exports, olive oil con­sump­tion is also expected to hit record-highs, fueled mostly by more avail­abil­ity on the mar­ket and shift­ing con­sumer pref­er­ences for olive oil use in home cook­ing.

Steadily ris­ing veg­etable oil prices over the past year have also made olive oil more afford­able for most con­sumers. While prices have increased in the E.U,’s three bench­mark mar­kets and Tunisia, they have not kept pace with the price of other com­mon veg­etable oils, which have dou­bled in the past 12 months.

As pro­duc­tion, exports and con­sump­tion are all expected to grow, olive oil end­ing stocks are likely to hit a five-year low in both the E.U. and the rest of the world, the USDA added. Olive oil stocks cur­rently sit at 510,000 tons, their low­est point since 2016/17.

Low end­ing stocks and ris­ing demand for olive oil both lay the ground­work for fur­ther price increases in 2022, an allur­ing prospect for pro­duc­ers after more than three years of what they have described as unsus­tain­ably low prices.

• USDA