Olive Oil Market Report – October 2024

High hopes for the upcoming harvest in the Mediterranean, with few exceptions.

 

By Franziska Finck — October 23, 2024

 

What’s happening this month?

As farmers and mills gear up for the new harvest season, September trade figures keep showing a solid demand for olive oil and extra virgin olives. As a direct consequence, the remaining inventory available for purchase, especially in Spain, is running extremely low.

 

Recent rainfall and optimistic forecasts have led to a slight price decline in the Spanish market since the beginning of October. Further decreases could be on the horizon in the next few weeks, especially if the Spanish government and major market players continue expressing their optimism.

 

Farmers and cooperatives across the Mediterranean have little incentive to lower their prices sensibly and will probably hold their position for as long as possible until the new harvest volumes start replenishing their stain and steel tanks and increasing the opportunity for buyers and sellers to act and compete on a ground level.

 

While Spanish Evoo is experiencing a slight decline, Italian Evoo is maintaining a steady demand and evaluation, hovering around 9 Eu/Kg, in line with 2024 trends.

 

For this reason, we could expect to see the gap between Spanish and Italian Evoo grow further from the current 2.00 Eu/Kg difference and possibly return to pre-2022 levels before the sharp production drop in the Iberian peninsula.

 

On October 21th, the aggregated numbers from Poolred and Ismea, two reliable platforms monitoring average trade value fluctuations in Spain and Italy, respectively, reported the following prices at the point of origin:

 

Spain: 6.859 Eu/Kg (Poolred)
Italy: 9.17 Eu/Kg (Ismea)
Greece: 7.15 Eu/Kg (Ismea)
Tunisia: 7.23 Eu/Kg (Ismea)

 

It’s important to keep in mind that trade monitoring platforms may not consider differences in quality and grade. For high-quality extra virgin olive oil, particularly those suitable for export with low pesticide residues, our sourcing team recommends expecting a premium of at least 0.20 to 0.30 Eu/Kg, with higher prices for traceable and certified products.

 

Sources: Poolred, Ismeamercati

 

 

 

Spanish and Italian reserves

Last week an article from Olimerca, one of Spain’s leading magazines for the olive sector, raised concerns on the national stock situation.

 

Historically between October and well into the following year, Spanish groves and mills are capable of delivering over 1 million Tons, on average, between Olive Oil and Extra Virgin Olive Oil grades, accounting for about half of the global production.

 

In September 2024, Spanish shareholders released 86,000 Tons in the market, confirming once again that demand for olive oil is not going to level off in the final months of the year.

 

Taking these numbers in account. Spain’s official reserves are now lingering at 186,303 Tons as of September 30th, a value 25% lower than the same period last year.

 

Looking at historical data, we should see a gradual input of fresh Olive Oil from the first months of harvest, between 120,000 and 130,000 Tons, which, according to Olimerca, might not be enough to sustain the demand and replenish the thin reserves, and match the trade needs.

 

Italy also reported a September inventory of just 40,213 Tons for Italian Extra Virgin Oil. With an average monthly internal consumption of 40,000 Tons, local and international traders could run out of buying opportunities for this highly prized origin very soon.

 

Journalists, public entities, and private businesses may be engaged in a contest over data, attempting to influence buying decisions through public announcements. However, it is undeniable that these inventory numbers should be monitored closely. Even a small event, such as a delayed harvest in Spain caused by rainfall in mid-October, could lead to new tensions and rising prices.

 
 
 

Harvest expectations 2024/25

Spain

 

Over the last few weeks, the European and International press have been particularly concerned with the question of what the coming Olive harvest might look like. At the beginning of October, the Spanish Ministry of Agriculture, Fisheries and Food (MAPA) published the first official assessment of the coming harvest.

 

According to this report, the production for the 2024/25 campaign will reach 1,262,299 Tons, which would represent an increase of 48% compared to the previous season and would be 14% above the average of the last 5 years.

 

Andalusia, Spain’s most significant production area in the South of Spain, expects its olive oil production to reach 1,021,000 Tons in the 2024/25 campaign, which would be even 76.6% more compared to last year and 19.7% more than the average of the previous five years. The percentage of these Tons that will be graded as Extra Virgin Olive Oil, or categorized as lower grades, will be a critical factor in establishing the baseline for trade evaluations in 2025, globally.

 

Italy, Greece, Tunisia, Turkey and Portugal

 

According to the same article, Portugal and Morocco will lag slightly behind in the next crop year, with just 170,000 – 200,000 Tons (Portugal) and 60,000 – 80,000 Tons (Morocco). An article from Mercacei, another Spanish publisher focused on the olive oil sector, reported the opinions of various experts from main producing countries in the Mediterranean, responsible to Spain, for most of the world supply.

 

According to the article, Italian farmers are forecasting a harvest of approx. 220,000 – 240,000 Tons, well below historical levels, and this data seems corroborated by different sources. The north and center of Italy, where prized oils like Toscano PGI and Garda PDO are produced, expect crop yields of + 70% compared to last year, but this will not be enough to compensate for the losses in the main growing areas in the south, Sicily and Puglia.

 

Similar to what happened in Spain in the last two consecutive crops, the olive trees in the south of Italy have been under extreme stress this year, due to the lack of rain and the persistently high and abnormal temperatures, resulting possibly a drop in production of around 40%.

 

On the bright side, Italian farmers report that despite the reduction in total volume, many of the national mills will provide Extra virgin oil of the highest quality, free from defects and issues generated by common pests, like the fruit fly.
Greek voices quoted in this media are betting on 250,000 Tons, resulting in an increase of around 60% compared to last year.

 

In Tunisia, the long-awaited rain at the end of the summer has helped agriculture significantly: here experts are talking about a harvest expectation of 280,000 – 320,000 Tons, which would be an increase of around 33% compared to the 23/24 crop.

 

Turkey’s harvest expectations are over 350,000 – 360,000 Tons, confirming the growing role of this country in the international scene.

 


 

Final thoughts

As forecasts improve in accuracy and mills begin the initial test runs to define yield and quality grade potential from different areas, the available data start to define possible market trends for 2025.

 

Prices and sales volumes are expected to improve due to the generally positive harvest forecasts from nearly all countries in the Mediterranean region, particularly Spain. After two poor harvest years, Spain is likely to reach or even exceed the one million ton mark, significantly contributing to the global supply, which is projected to total around three million tons, including both Extra Virgin Olive Oil and lower grades.

 

Businesses within the olive oil industry, especially farmers, are beginning to envision a future where climate change plays a crucial and central role in this sector. The challenges faced by Spain and the ongoing issues in Italy may soon become the “new normal”. Universities, governments, and both private and public stakeholders are responding to this challenge by enhancing dialogue and collaboration to secure the future of olive oil and support the many families that depend on it.

 

Our sourcing team and market experts are looking closely at the Italian harvest results, which most likely result in sustained evaluation next year. Italian Extra Virgin Olive Oil is appreciated and marketed at a premium as a single origin. It is also often used to improve the intensity of the flavor profile and freshness in blends, combined with other origins.

 

We recommend that our readers keep monitoring the trade news, which will most likely increase in volume and frequency in the coming months. However, some level of strategy could also be at play within specific announcements.

 

In this exceptional context of scarcity, if you have any doubts about the quality of a batch available on the market, we strongly advise consulting with experts and certified laboratories for additional assurance before making a purchase. For long-term buying strategies, we recommend exercising a bit more patience and collaborating closely with established partners. This will help mitigate the risk of misinterpreting market signals and ensure a smooth strategic positioning on store shelves in 2025, as prices are expected to trend down.

 

Please do contact us with any questions you might have on this report, private label, packaging and marketing trends, and any other needs you may have in the world of Extra Virgin Olive Oil.

 

Our teams will also be available for meetings during the upcoming PLMA, USA trade show.

 


 

Sources:

Olimerca

Mercacei

Poolred

Ismea Mercati

 

 

Franziska Finck

is a Sales Manager at a Certified Origins company. She is a German native who has lived in Spain for over 15 years. She vividly remembers being introduced to the world of Mediterranean products – immediately falling in love with their food culture. This led her to work in the food industry in international exports, bringing her passion and conviction for good, natural, and healthy food to the world.

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