During the harvest season on October 29, 2022, Bosnian olive farmer Jure Susac from Ljubski, a town in western Herzegovina, delivers the picked olives to an oil mill in Capulina.
Elvis Baruchic | Elvis Baruchic AFP | Getty Images
spanish De OreoThe world’s largest olive oil producer says one of the most challenging moments The industry’s history appears to be coming to an end,”liquid gold“In the coming months, prices are expected to almost halve from their all-time highs.
a longer period of time climate driven extreme weather and drought Olive harvests in southern Europe have been severely affected in recent years, culminating in dizzying price increases that have shocked industry veterans and consumer Same.
Shortages of olive oil, a super staple of the Mediterranean diet, have plunged the industry into crisis mode, arouse Concerns about food insecurity have even led to Crime surge Available in Spanish supermarkets.
But prices have since cooled as industry forecasts significantly higher harvests in 2024-2025, especially in major producers such as Spain, Greece and Tunisia.
“While some improvements have been made, it is not entirely accurate to say that the crisis is over,” Deoleo chief sales officer Miguel Ángel Guzmán told CNBC via email.
“We are still in a phase of tight olive oil prices, especially for premium oils such as extra virgin,” Guzman said, noting that there is still some uncertainty in the market ahead of the 2024-2025 olive harvest.
“The outlook for the coming months is positive, however, as the market is expected to begin to stabilize and a gradual return to normal conditions is expected as new harvests progress and supplies increase,” Guzman said.
“Gradual normalization”
Deoleo is the manufacturer of household olive oil brands such as Bertolli and Carbonell. descriptive A perfect storm of challenges this summer has been called “one of the most difficult moments in the industry’s history” and calls for “profound change” in the industry.
The price of extra virgin olive oil in Andalusia, Spain, was €6 ($6.33) per kilogram as of November 6, according to agricultural and food market intelligence company Expana. It fell by about 19% month-on-month and nearly 35% from the historical high of 9.2 euros set in January.
Spain accounts for more than 40% of the world’s olive oil production, making it a global price reference.
A man holds a bottle of olive oil in Barcelona, Catalonia, Spain on June 21, 2024.
Europress News | European Press | Getty Images
“If weather and harvest conditions remain stable in the coming weeks, origin price easing is expected to begin between November, December and January,” Guzman said.
“There are signs that if everything goes as planned, and especially if rains continue to be beneficial to production, we may see prices trending downward throughout 2025,” he added.
Deoleo said olive oil prices should fall to around 5 euros per liter, down sharply from this year’s highs of 9 to 10 euros in Spanish supermarkets.
“This price is reasonable given the increase in production, which will ease market tensions and facilitate the gradual normalization of prices after a period of volatility,” Guzman said.
‘An existential threat to the industry’
Most in the industry are “very, very pessimistic” about the price outlook, said Kyle Holland, senior market reporter for oilseeds and oils at Expana.
“Production data is key. For Spain we expect production to be probably 1.3 million tonnes compared to last season’s production of 670,000 to 680,000 tonnes, depending on who you talk to, so basically not far from doubling. .
In addition to Spain, Expana’s Holland said good olive harvests are expected in Greece, Tunisia and Turkey, noting that the quality of the olives also appeared to be “very good.”
“Most people are very, very pessimistic. They don’t know how prices are going to go up with our supply,” he added.
Aerial view of Menemen Plains in Izmir, Turkey, August 27. Agricultural workers clean grapes using a mixture of water, olive oil and potassium carbonate, known as “posata”, to make the grapes look brighter and brighter. Protect them from the sun’s scorching rays.
Anadolu | Anadolu | Getty Images
Deoleo’s Guzman said two consecutive years of drought have raised concerns in the industry, which “is facing the need to adapt to an increasingly uncertain future caused by climate change.”
To address this challenge, Guzman said the olive oil industry is investing heavily in new agricultural technologies and developing more resilient olive varieties.
“This is crucial as climate change has been identified as an existential threat to the industry,” he added.
