Renewed Concerns of Extra Virgin Olive Oil Shortages in Spain

Extra virgin olive oil supplies from the world's largest producer are expected to fall short of both domestic demand and export needs, potentially signaling an impending global shortage.
Columbus Market, Valencia
By Daniel Dawson
May. 9, 2024 13:53 UTC

Spain’s lead­ing agri­cul­tural union has pre­dicted that olive oil short­ages may occur in the world’s largest-pro­duc­ing coun­try in the sec­ond half of the 2023/24 crop year, which ends in September.

Cooperativas Agro-Alimentarias said the lat­est data pub­lished by the Ministry of Agriculture, Fisheries and Food indi­cate that the 560,000 tons of olive oil sup­ply to the mar­ket will be insuf­fi­cient to cover domes­tic demand and exports until the next har­vest.

There will be enough olive oil stocks to reach the start of the cam­paign, but this will all be vir­gin olive oil, and there will be almost no extra vir­gin olive oil left.- Juan Vilar, strate­gic con­sul­tant

The union cited con­sec­u­tive years of poor har­vests – Spain pro­duced 846,800 tons in 2023/24 and 665,800 tons in 2022/23 com­pared to the aver­age of 1.4 mil­lion tons from the pre­vi­ous five crop years – com­bined with low yields else­where in the Mediterranean basin and the con­tin­ued pro­hi­bi­tions on bulk exports from Turkey and Morocco for the cur­rent sit­u­a­tion.

Cooperativas Agro-Alimentarias esti­mates that monthly con­sump­tion and exports can­not exceed 90,000 tons if the cur­rent stock lasts until the next crop year.

See Also:European Olive Oil Supply Hits Decade-Low

In the last five months of the pre­vi­ous four crop years, exports and domes­tic con­sump­tion only fell below 90,000 tons in August 2023, a moment in which lead­ing experts voiced their con­cerns about olive oil short­ages.

Among them was Juan Vilar, a strate­gic con­sul­tant for the sec­tor. However, he cur­rently dis­agrees with Cooperativas Agro-Alimentarias and antic­i­pates there will be enough olive oil to meet demand ahead of the next har­vest.

There is enough olive oil. There will be no short­age,” he said. Based on cur­rent mar­ket con­di­tions, he esti­mates there will be up to 120,000 tons of olive oil stocks in Spain and 260,000 tons glob­ally at the end of 2023/24.

In the Northern Hemisphere, 65 per­cent of olive oil con­sump­tion takes place at home,” Vilar said. From this moment of the [crop] year onward, more peo­ple tend to eat out­side of the home in restau­rants or order deliv­ery.”

Additionally, he pointed out that Mediterranean coun­tries are see­ing an increase in the con­sump­tion of other edi­ble oils, specif­i­cally sun­flower oil.

Instead, Vilar said a short­age of extra vir­gin olive oil is more likely but believes there will be just enough to make it to October when the early har­vest begins.

There will be enough olive oil stocks to reach the start of the cam­paign, but this will all be vir­gin olive oil, and there will be almost no extra vir­gin olive oil left,” he said.

Frankie Gobbee, the co-founder and chief exec­u­tive of Argentina Olive Group, Argentina’s largest pro­ducer and sup­plier of major Spanish brands, believes Spain will not be the only coun­try to expe­ri­ence extra vir­gin olive oil short­ages this year or in the com­ing crop years.

Gobbee said the global olive oil avail­abil­ity, total sales in the cur­rent cam­paign, and har­vest prospects for 2024/25 indi­cate there may be short­ages.

Global pro­duc­tion will be some­what lower than ini­tially esti­mated,” he said. We esti­mate a global pro­duc­tion of 2,105,000 tons and an avail­abil­ity of 2,505,000 tons. We are talk­ing about 11.7 per­cent less oil than last sea­son and 29.6 per­cent below 2021/22.”

The sec­ond con­sec­u­tive year of poor global pro­duc­tion will impact all grades of olive oil. A shorter and gen­er­ally faster har­vest pro­duced less lam­pante olive oil.

Meanwhile, a poor har­vest in Greece means less extra vir­gin olive oil avail­able for local and Italian bot­tlers.


Lower-than-expected har­vests in Algeria, Israel, Lebanon, Morocco, Palestine and Turkey, along with antic­i­pa­tion of poor har­vests in the three lead­ing Southern Hemisphere exporters – Argentina, Chile and Peru – have fur­ther com­pli­cated the sit­u­a­tion by restrict­ing the sup­ply for bot­tlers and curb­ing bulk exports.

Clearly, we have a mar­ket with less oil than last sea­son and much less than in the 2021/22 cam­paign, together with a greater con­cen­tra­tion in the hands of Spanish pro­duc­ers,” Gobbee said.

Reduced pro­duc­tion will result in decreased global olive oil sales. The lower avail­abil­ity forces lower con­sump­tion, 12 per­cent less than in the pre­vi­ous year and 30 per­cent less than in 2021/22,” Gobbee said.

However, he empha­sized that decreas­ing con­sump­tion is due to lower pro­duc­tion, not vice versa.

Vilar agreed. Potential demand was greater than actual sup­ply, so there was an increase in prices such that poten­tial demand has been falling until it has bal­anced with real sup­ply,” he said.

Now that it is going to hap­pen in antic­i­pa­tion of the next cam­paign world­wide, it is very likely that there will be three mil­lion tons, then the oppo­site sit­u­a­tion will occur because the poten­tial sup­ply will be greater than the real demand,” he added.

While global olive oil prices at ori­gin have fallen from their mid-January record highs, they remain more than dou­ble what they were two years ago.

Prices are going down lit­tle by lit­tle except for extra vir­gin. When the cam­paign starts, depend­ing on what the cam­paign is like, it will go down faster,” Vilar said. And the faster olive oil pro­duc­tion grows, the faster the price will fall until a bal­ance is pro­duced between real sup­ply and poten­tial demand.”

Still, Gobbee and Vilar antic­i­pate prices will remain rel­a­tively high com­pared to the aver­age in 2021/22 through the mid­dle of the com­ing crop year and pos­si­bly beyond.

According to the lat­est data from Infaoliva, extra vir­gin olive oil prices have been on the rise since the start of April, when prices fell to their low­est point in 2024, climb­ing from €7.00 to €7.50 per kilo­gram at the time of writ­ing. Virgin and lam­pante prices have fol­lowed a sim­i­lar pat­tern.

The tra­jec­tory of olive oil prices will pri­mar­ily be based on how the spring unfolds in the Mediterranean basin.

As every year, it is oblig­a­tory to try to antic­i­pate what the next har­vest will be like,” Gobbee said. Although we are very far away, it is true that, as of today, no event pre­vents us from esti­mat­ing an aver­age 2024/25 har­vest. There has been noth­ing irrepara­ble’ up to this moment.”

However, sig­nif­i­cant tem­per­a­ture fluc­tu­a­tions, espe­cially in the south­ern Spanish region of Andalusia, respon­si­ble for a plu­ral­ity of global pro­duc­tion, could sour the upcom­ing har­vest as they have in the pre­vi­ous two crop years.

Vilar, who lives in Jaén, Andalusia’s largest olive oil-pro­duc­ing province, said the sit­u­a­tion in the olive groves looks promis­ing.

The region has not expe­ri­enced the heat­waves that con­tributed to poor har­vests in the pre­vi­ous two sea­sons, and there has been plenty of rain. More rain is fore­casted for later this month.

The wide­spread rains… have been won­der­ful news for the coun­try­side and have improved expec­ta­tions for the next cam­paign,” Cooperativas Agro-Alimentarias con­firmed. However, it is too early to esti­mate pro­duc­tion because the next har­vest will be con­di­tioned by the spring weather.”


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