Olive Oil Monthly Market Report – June, 2022
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What’s happening this month?
The Evoo global market holds its breath as the main Olive Oil countries release early projections for the upcoming harvest season. The extended periods of above-average temperatures and lack of rain could result in an overall negative trend across the Mediterranean area, with a few surprises.
The market situation in Spain
As we approach summer and the end of the blooming season for olive oil trees, the major Spanish cooperatives are starting to release the initial production estimates for the next Olive Oil harvest.
A vast majority of Spanish olive groves are rain-fed, and the lack of water, heat waves, and the above-average temperatures, especially in the south of Spain, could have affected its production potential.
Today, the general impression from the market is that the next production in Spain, the largest producer of Evoo in the world, could be 20% to 30% lower when compared to the previous crop.
A recent abundant rain season in other parts of Spain could improve the situation nationally.
Despite the lower forecast for the next crop in Spain, the market is stable and not trending up currently. Higher transport, energy, and food costs lead to an overall decrease in Extra Virgin home consumption, and a lower market cost could help keep global consumption from falling further.
We expect the largest Evoo trading companies to monitor the market closely, waiting for more clarity on the estimates of the next crop.
Similarly, Spanish Evoo producers are not pushing to put on the market their existing stock as they wait to see the effect of the weather conditions on the harvest, which could increase the value of the Evoo from the previous crop in their possession.
The global shortage of seed oils caused by the war in Europe maintains a small value gap between refined and extra virgin olive oil.
The market situation in Italy and other mediterranean countries
In Italy, Portugal, and Tunisia, we observe similar trends to what is happening in Spain. First estimates in Italy project a sharp decrease in production, down to -45% less than the previous crop. Portugal -40% and Tunisia as low as -60%. Dry weather and water scarcity are the main drivers of these negative projections. Greece’s crop projections are optimistic, trending to be 30% higher, thanks to favorable weather. Although it is still very early to give any definitive global harvest estimates for the future crop, our team of experts expects the total production figures for the Mediterranean area Olive Oil in 22/23 to be as follow:
Spain: 1.100.000 Tons
Italy: 200.000 Tons
Portugal: 160.000 Tons
Greece: 350.000 Tons
Tunisia: 150.000 Tons
Final Thoughts
Although the market appears to be stable right now, there is a solid chance that once the future projections will confirm the current trend, especially in Spain, the price at the source both for existing reserves and future crop will start trending up.
We reccomend to talk closely with your sourcing expert to be always up-to-date on the market. We will continue monitoring the market and sharing our projections and news about any changes. Feel free to reach out to talk with your team of sales experts for any additional question or comment you may have.