Market Update: Olive Oil
The total olive production in Spain as of December 31 to date is 584,780 tons. About 120,000 more tons of olives will be added in January and February 2024. This will be enough to meet the demand of the next 10 months.
This does mean that a lot less has been harvested than in previous years and that the price will therefore not drop. More rain is still needed to ensure a better harvest for the 24/25 season. The first indications and expectations will be visible during the flowering period in May. Italy and Greece also expect a small harvest, which means that these harvests will not compensate for the disappointing harvest in Spain.
Regardless of how the 2023/24 harvest ends, it will exceed the record low yield of the previous harvest year, when Spain produced 664,033 tonnes.Major olive oil producing regions, including Andalusia and Castilla-la-Mancha, are estimated to fell short by 30 and 23 percent. The reasons for the two consecutive below-average harvests are due to Spain's unprecedented drought and high temperatures in May, which damaged many olive trees at the time of flowering and failed to bear fruit.
What does this mean for the price of Olive Oil?
Low yields have hit prices hard in the market. The price of olive oil at retail in Spain recorded an increase of almost 55 percent in 2023 compared to the previous year, according to data from the Consumer Price Index of the National Statistical Institute of Spain. Dhe prices at the origin are influenced by olive oil stocks, the progress of the harvest and how reality compares to expectations and weather forecasts.
We hope for more rain in the dry zones of Spain in the coming years, so that the harvests will yield as much as usual. This high supply will lead to less scarcity and thus lower and more stable olive oil prices.