Olive oil prices in the world’s largest producer, Spain, have fallen to half their record levels, with representatives of the Spanish market estimating that “one of the most difficult times in the history of the sector seems to be coming to an end”.
A prolonged period of extreme weather and drought in southern Europe has severely affected the olive harvest in recent years, culminating in a dizzying price rally that has shocked industry representatives and consumers alike.
The fact that Spain owns more than 40% of the world’s olive oil production makes it a market leader in how prices will be shaped globally.
Market estimates point to significantly improved harvests in 2024-2025, particularly in key producing countries such as Spain, Greece and Tunisia
At the same time, shortfall harvests across the Mediterranean basin over the past two years have pushed the industry into crisis mode, while predictions of a possible food crisis flared up. It is characteristic that the possibility of a shortage of olive oil and the high selling prices on the shelf even caused an increase in crime in Spanish supermarkets.
However, prices have since declined as market estimates point to significantly improved harvests in 2024-2025, particularly in key producing countries such as Spain, Greece and Tunisia. It is characteristic that according to the first forecasts the Spanish production is expected to reach 1.3 million. tons, from last season’s 680,000 tons
Is the olive oil crisis over?
“Although important steps have been taken it would not be entirely accurate to say that the crisis is over,” Miguel Ángel Guzmán, head of sales at Deoleo, the largest multinational olive oil processing company, told CNBC
“We are still going through a phase of tension in olive oil prices, especially in higher quality oils like Extra Virgin,” Guzmán said, noting that there is still some uncertainty in the market ahead of the 2024-2025 olive harvest.
“However, the outlook is positive for the coming months as the market is expected to begin to stabilize and normalcy is expected to be gradually restored as the new harvest progresses and supply increases,” Guzmán noted.
Perfect storm of challenges
Deoleo described a perfect storm of challenges, pointing out that the summer was “one of the most difficult times in the history of the industry”, stressing the need for a radical restructuring of the olive industry.
Extra virgin olive oil prices in Spain’s Andalusia stood at 6 euros ($6.33) per kilogram on Nov. 6, according to Expana, a market intelligence firm that focuses on agriculture and food. That’s down about 19% month-on-month and nearly 35% from a record high of 9.2 euros in January.
When will olive oil prices relax?
The reduction in producer prices in Spain is expected to start between November, December and January, but provided that “the weather and harvesting conditions remain stable in the coming weeks,” Guzmán noted, adding that “indications are that if “If all goes well, especially if the rains continue to favor production, we could see a downward trend in prices throughout 2025.”
According to Spanish multinational Deoleo, olive oil prices should drop to around 5 euros per litre, a sharp drop from the highs of 9 to 10 euros that have become the norm in Spanish supermarkets this year. “This price would be reasonable in a context of increased production, which would ease tensions in the market and facilitate the gradual normalization of prices after a period characterized by volatility,” Guzmán noted.
Source OT
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