- Olive oil prices are expected to drop due to increased production this year.
- Forecasts suggest moderate to good production ranging from 250,000 to 280,000 tons.
- Mild weather conditions are necessary for these estimates to come to fruition.
- Prices are already retreating, with current prices at 7 euros per kilo from a previous high of 9.5 euros per kilo.
- Continued drought could affect both the volume and yield of the harvest.
- Reserves will suffice until the next harvest, albeit they are not extensive.
- Mediterranean countries face similar scenarios, with Spain’s production at maximum potential.
- Consumer habits have shifted due to high prices, resulting in a 40% reduction in consumption over the past two years.
- The market is expected to correct soon, with prices anticipated to decrease further.
- By 2025, both consumers and producers should see favourable conditions.
According to current forecasts, this year’s olive oil production is anticipated to be moderate to good. The National Interprofessional Olive Oil Organization (EDOE) President, Manolis Giannoulis, has indicated that production is projected to be between 250,000 and 280,000 tons. For this to be achievable, mild weather, moderate temperatures, and some rainfall must occur.
Giannoulis emphasized that a smooth continuation of weather patterns until the harvest season, four months from now, is essential. Producers are concerned about high temperatures and lack of rain.
Producer prices have already decreased. From historical highs of 9.5 euros per kilo just a few months ago, the price for extra virgin olive oil has now dropped to 7 euros per kilo. Prices are expected to fall further as the harvest approaches, provided there is sufficient supply, though production and drought will significantly impact this. Drought leads to fruit loss and lower yields as trees attempt to conserve themselves.
According to Giannoulis, existing reserves, though not large, should be adequate until the next harvest.
Other Mediterranean olive-producing nations share similar challenges. Spain, home to 45% of world production, is on track to reach 70% of its maximum annual production level. Giannoulis noted that consumer habits have drastically changed due to rising prices, with a 40% reduction in consumption over the past two years. Consumers are using less olive oil or opting for cheaper seed oils in some applications.
Despite these challenges, Giannoulis remains optimistic that market corrections will occur shortly. As the harvest meets consumption demands, prices should decrease on shelves, with a possible break-even point in the coming spring. By 2025, conditions should satisfy both consumers and producers.
