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Flash News Commodities: Updates on the Olive Oil Market
15 November 2024
Italian olive oil remains the highest in terms of quality in Europe. Despite Italy faces reduction in production due to drought
In recent years, production variability has extended beyond the typical fluctuations, exacerbating the usual dynamics of supply and demand. Product availability remains increasingly uncertain, and prices have risen sharply.
Italy
National olive oil production has plummeted due to drought and record heat. Despite the induced price increases, Italian oil quality remains the highest in Europe.
Spain
National olive oil production is projected to exceed 1,300,000 tonnes, reaffirming the prominence of Spanish olive oil in the global market.
Italy: Olive Oil Excellence Amid Quality and Climate Challenges
The drought and record heat in major production regions like Puglia and Sicily are causing a collapse in Italian olive oil production. According to estimates, a quantity of about 224,000 tons is expected, 32% less than the previous season. If confirmed, such estimates would push Italy from second to fifth place in the global ranking of leading producing countries.
The most significant impact is in Puglia, where the harvest is expected to be nearly halved compared to last year. In this region, which alone accounts for about one-third of Italy’s olive groves, flowering and fruit set have been quite limited this year, with plants suffering from water stress due to the lack of summer rains and high temperatures.
In contrast to the collapse in production in the South, the North has seen a record increase, with +75%, and the Centre (mainly Tuscany) with +70%, compared to a very poor 2023. Good news also comes in terms of quality, which is expected to be excellent, thanks to the efforts of around 400,000 national agricultural companies in ensuring a product of the highest standards, giving Italy the leadership in Europe for the highest number of protected designation of origin olive oils (42 PDO and 8 PGI).
Bottlers are facing an increasingly uncertain availability of national product, with consequent impacts on supply planning. This is compounded by the challenges faced by producers, and downstream by final consumers who have seen product prices rise, especially in the mass retail channels, over the past two years.
Mediterranean: Production Growth and Global Leadership in Olive Oil (Spain, Turkey, Tunisia, and Greece)
The 2024-25 season is expected to be very abundant, with an estimated volume increase of between 50% and 60%, which would bring world production to 3.1 million tons, 23% more than the last season. Spain, a historical market leader, is expected to reach a production of over 1,300,000 tons of oil, reaffirming its global centrality.
