Market Update: Olive Oil
The total olive production in Spain as of December 31 so far is 584,780 tons. Approximately 120,000 tons of olives will still be added in January and February 2024. This will be enough to meet demand for the next 10 months.
This means that once again, significantly fewer olives have been harvested compared to previous years, so the price will not decrease. More rain is still needed to ensure a better harvest for the 24/25 season. During the flowering period in May, the first indications and expectations will become visible. Italy and Greece also expect a small harvest, which means these harvests will not compensate for the disappointing harvest in Spain either.
Regardless of how the 2023/24 harvest ends, it will surpass the record low yield of the previous harvest year, when Spain produced 664,033 tons. Major olive oil producing regions, including Andalusia and Castilla-La Mancha, are estimated to have fallen short by 30 and 23 percent respectively. The reasons for two consecutive below-average harvests are due to unprecedented drought in Spain and high temperatures in May, which damaged many olive trees at the time of flowering and resulted in no fruit.
What does this mean for the price of Olive Oil?
Low yields have hit prices hard in the market. The retail price of olive oil in Spain recorded an increase of nearly 55 percent in 2023 compared to the previous year, according to data from the Consumer Price Index of the National Institute of Statistics of Spain. The prices at origin are influenced by olive oil stocks, the progress of the harvest, and how reality compares to expectations and weather forecasts.
There is hope for more rain in the dry zones of Spain in the coming years so that harvests will once again yield abundantly as before. This high supply will lead to less scarcity and thus lower and more stable prices for Olive Oil.