Global olive oil prices are skyrocketing

World prices for olive oil are rising rapidly as stocks are depleted in Spain, the world’s largest exporter, which accounted for 46% of global exports of this product in 2021. According to Mintec analysts, prices for extra virgin olive oil from Andalusia (where 80% of Spanish oil is produced) increased by 115% from 3.83 €/kg to a record 8.2 €/kg during the year.

In July, olive oil stocks in the country decreased by 73-75 thousand tons, and now producers have about 151 thousand tons left. If the rate of decline in stocks does not change, they will not be enough until October, when the new harvest begins.

According to the International Olive Council, in 2022/23 MY due to the severe drought in the major producing countries, the global olive oil production decreased from 3.5 mln tonnes to the 6-year low of 2.73 mln tonnes, in particular, in Spain – from 1.49 mln tonnes to 0.78 mln tonnes, and in Italy – by 40% to 235 thsd tonnes.

According to the International monetary Fund, in April, world prices for olive oil reached a maximum for 33 years of observations – 6269 $/t and continued to grow. In June, they amounted to 7200 $/t. Experts believe that in the coming months prices may exceed 10000 €/t.

In the current season, the olive harvest in Spain will be low, so the production of oil will not exceed 700 thousand tons, – reports Mintec. The second consecutive year of low harvest could lead to bankruptcy of many producers.

In other olive oil exporting countries – Greece and Italy – there is also a drought, which negatively affects the olive harvest. Therefore, the total production of olive oil in the EU in the current season may amount to only 1.3-1.45 million tons, compared to the 5-year average of 2.1 million tons.

The growth of prices for olive oil contributed to the August decision of Turkey to stop its exports until November 1, to slow down the domestic price growth. From November 2022 to July 2023, the country increased the exports of olive oil by 240% to 136.5 thsd tonnes, which resulted in the price increase by 102%.

Tags: prices, Spain, olive oil