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.See Also: 2021 Harvest Updates
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.