EU report forecasts olive oil market stagnation

According to the European Commission’s forecast, olive oil production and consumption will remain flat or decline slightly over the next ten years. In its latest medium-term agricultural forecast, the commission emphasized the detrimental impact of climate change on water availability and soil productivity.

According to the report, changes are “limiting the potential for yield growth and causing a northward shift in agro-climatic zones, which affects cropping patterns, including olive oil,” and these trends are expected to intensify. Agricultural production is projected to slow down, with demand for some commodities, including olive oil, expected to decline over the next ten years. The report highlights a significant decline in its consumption in the main producing countries between 2010 and 2024.

According to the Commission, the EU consumed 1.79 million tons of olive oil in 2010. This volume declined steadily to 1.59 million tons in 2021 and 1.23 million tons in 2022, with similar levels recorded in 2023 and 2024. These volumes are expected to remain unchanged until 2035.

In Spain, Italy and Greece, olive oil consumption is expected to decline by 3% per year over the next decade. On the contrary, in Portugal, consumption and availability of the product is expected to increase. Regarding production, the report highlights the gradual reduction of hectares of olive land in Italy and Greece, two of the continent’s three largest producers. This reduction will lead to a further decline in production over the next ten years.

“The future profitability of the olive oil sector in the EU depends on the successful transformation of production systems, i.e. from extensive orchards to intensive and highly mechanized plantations,” the report says.

The paper specifically mentions investments in plantations in Spain and Portugal, which are expected to contribute to average annual production growth of around 1.2% in Spain and 1% in Portugal over the next decade. Yields in these countries will grow by 0.7% and 1.4% per year, respectively.

Tags: olive oil, EU