Positive Olive Crop Forecasts Indicate Potential Price Relief for Olive Oil
A significant improvement in olive harvests is anticipated this autumn for major EU producers, potentially alleviating the record-high olive oil prices that surged earlier this year, according to experts.
In January, olive oil prices in the EU reached unprecedented levels, soaring up to 50% compared to the previous year, which significantly influenced consumer choices. The 2023/2024 season faced challenges, including extreme temperatures, drought, and increasing energy costs, which tested the market.
“Olive oil prices in all producing countries have almost doubled over the past two years,” stated Dimitra Aliefs, an economist and member of the Scientific Society of Olive Cultivation Encyclopaedists (4E). Although prices have been declining since January, they remain about 20% higher compared to last year, as reported by the International Olive Council.
However, Aliefs expressed optimism as projections for the 2024/2025 olive harvest look promising, particularly in Spain, which accounts for 45% of the world’s olive oil production and 70% of the European Union’s output. This means that Spain’s yields have a significant impact on prices within the EU. Good harvest forecasts are also expected from Greece, the third-largest producer in the bloc.
Rafael Picó, director of the Spanish Association of the Industry and Export of Olive Oils (Asoliva), echoed this optimism during an interview. He noted the beneficial effects of spring rains in Spain on olive groves and mentioned that production costs are starting to normalize.
Nevertheless, it will take time for the expected increases in yield to reflect in market prices. “Although production begins on October 1, the new stock won’t be available in the national market until late November and internationally until late December or January,” Picó explained. According to Aliefs, olive prices are expected to drop from nearly €9 per kilo in recent months to a more typical range of €5 to €6 per kilo.
In Spain, where olive oil holds cultural and economic significance, households have begun substituting their cherished olive oil for more affordable sunflower oil, which has emerged as the top-selling oil for the first time in decades. Aliefs noted, “When prices rise that high, consumers are forced to seek alternatives,” pointing to how cheaper sunflower oil has infiltrated Mediterranean kitchens traditionally centered around olive oil.
Picó also commented on the repercussions of high prices on exports, revealing a 40% decrease in Spanish olive oil exports by volume in the first half of 2024 compared to 2022. He highlighted the collapse of markets in certain regions, particularly in Asia, where the appeal of olive oil is closely linked to its pricing, making alternative vegetable oils more competitive. In contrast, countries with higher per capita income, like the United States, have tended to remain loyal to olive oil despite the price hikes.
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John Peterson graduated with a degree in Agricultural Sciences from Wageningen University in the Netherlands. His specialization is in sustainable crop production and soil health management. John is passionate about integrating modern technology with traditional farming methods to enhance productivity while preserving the environment. He currently works as a consultant, helping farmers adopt sustainable practices.