Home Industry News Economics EU Faces Domestic Olive Oil Shortage

EU Faces Domestic Olive Oil Shortage

In MY 2023/24, the EU is facing a second consecutive short olive oil production crop. Consumer price increases resulting from the limited domestic availability will contribute to reduced consumption. The short crop will also preempt exports from expanding for the second consecutive year, while also continuing to push stock levels down.

Production, Supply, and Demand

Production

Source: FAS Europe Posts.

N.B.: Post trade and production data include only HS Code 1509.

Estimates based on precipitation levels to date, temperatures during the olive trees flowering season, and the subsequent extreme summer heat waves that resulted in unripe fruit dropping, indicate that the European Union’s (EU) olive oil output in MY 2023/24 could amount to just above 1.4 million Metric Tons (MT).

Olive harvest in the EU runs from fall to the beginning of spring. While spring conditions determine flowering and summer temperatures influence fruit development, fall precipitations still play a role in final output levels. Olive tree’s alternative bearing also plays a role in production volumes. New plantations under irrigation entering production also continue to soften the impact of alternative bearing in olive oil production levels across the EU. The EU’s olive oil production is concentrated in a handful of Member States. The EU is the world’s largest olive oil producer, accounting for over 60 percent of the world production.

In Spain, which produces about half of the world’s olive crop, extreme weather conditions resulted in short production for a second year. After a spring heat wave impacted flowering, the harvest in Spain was forecast to be only 15 percent larger than last year, which was the worst olive oil production year in nearly a decade. A series of summer heat waves caused trees to drop unripe fruit to conserve moisture. However, abundant fall precipitation contributed to improve the initially negative production outlook. The latest official estimates indicate that olive oil production in Spain in MY 2023/24 may reach up to 765,200 MT.

In Italy, MY 2023/24 olive oil production is forecasted at 300,000 MT, mainly due to the promising conditions in the regions of Puglia, Calabria and Sicily, which account for approximately 70 percent of the country’s olive oil production.

Greece’s MY 2023/24 olive oil production could be as low as 180,000 MT. The mild winter did not favor flowering and extensive rainfall in spring further reduced fruit-set. Additionally, extremely hot summer conditions followed by autumn rainstorms ‘Daniel’ and ‘Elias’ reduced the yields in the central Greece area. Chalkidiki in the north and Crete in south Greece also report significant olive oil production decreases.

Consumption

MY 2023/24 and MY 2022/23 olive oil consumption has been revised down compared to previous estimates in response to soaring EU olive oil consumers’ prices in the main producing and consuming countries. Likewise, olive oil prices in producers’ markets in the EU also far exceed previous season’s levels.

Trade

The second consecutive short EU olive oil crop is expected to limit the bloc’s export potential in MY 2023/24. The EU’s total olive oil export levels in MY 2022/23 also declined significantly, driven by the limited domestic availability. The United States followed by Brazil are the main destinations for EU olive oil exports.  Read the full USDA-Foreign Ag Service Report HERE.

Leave a Reply

Your email address will not be published. Required fields are marked *