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The upcoming year may bring a substantial increase in olive oil supplies to Europe as Spain resumes its production after a period of drought, reports the European Commission. However, it remains unclear whether households will return to consuming this oil, having given it up due to extremely high prices.
It is forecasted that olive oil production in the EU will increase by 31% to 2 million tons in the 2024/25 season, exceeding the annual average by 9%. This is due to the unfavorable harvest in Italy being compensated by increased production in Spain, Greece, and Portugal.
For instance, Spain, the largest olive oil producer in the EU, plans to increase production of this product by 48% to 1.26 million tons compared to 2023 thanks to abundant spring rains that facilitated early olive development. The country's authorities warn that the final harvest will depend on weather conditions in the coming weeks, however, "prices will be lower than in 2023 as oil volumes are almost twice those of last year."
Olive oil prices reached record highs after two poor harvest years, but now they have decreased by 20% due to improved yields. However, the price drop for consumers will occur much later.
Last year, oil producers were paid 10 euros per liter, and now prices have fallen to 8 euros per liter and continue to decline. It is worth noting that in Andalusia, where 80% of Spanish olive oil is produced, prices for extra virgin cold-pressed oil rose from 3.5-4 euros per kilogram in 2021 to a record 10 euros per kilogram in 2023.
In light of the significant increase in olive oil prices, some households in 2024 switched to more affordable sunflower oil, leading to a sharp change in consumption patterns.
According to the forecasts of the European Commission, olive oil consumption in the EU, following a 22% reduction over the past two years, will increase by 7% in 2024/25. The resumption of supplies will lead to further price decreases. However, it is still unknown how quickly prices will respond to the increased availability and whether consumers will change their habits.
The European Commission also predicts that olive oil exports from the EU will increase by 10%, while imports will decrease by 7%. However, good harvests in competing countries such as Tunisia and Turkey may have a restraining effect on trade balance.
