Prices for olive oil in Europe continue to fall amid a significant increase in production

Next year, olive oil supplies in Europe may increase significantly as Spain resumes production after a drought, the European Commission reports. However, it is not known whether households that have abandoned the use of this oil due to record high prices will return to consuming it.

According to forecasts, in MY 2024/25 olive oil production in the EU will increase by 31% to 2 mln tonnes compared to the previous season, which is 9% higher than the 5-year average, as the poor harvest in Italy will be offset by the increased production in Spain, Greece and Portugal.

Thus, the largest EU producer of olive oil – Spain this year will increase its production compared to 2023 by 48% to 1.26 million tons due to spring rains, which stimulated the early development of olives. The country’s authorities warn that the final harvest will depend on the weather conditions in the coming weeks, but “prices will be lower than in 2023, as the volumes are almost twice as high as last year”.

Olive oil prices reached record levels after two poor harvest years, but are now down 20% on the back of improved yields. However, prices for consumers will fall much later.

Last year, oil producers were paid 10 €/l, and now prices have fallen to 8 €/l and continue to fall. As a reminder, in Andalusia (where 80% of Spanish oil is produced), prices for extra virgin crude oil rose from 3.5-4 €/kg in 2021 to a record 10 €/kg in 2023.

Amid a significant rise in olive oil prices, some households switched to cheaper sunflower oil in 2024, which dramatically changed consumption patterns.

According to the European Commission, olive oil consumption in the EU will grow by 7% in MY 2024/25 after a 22% decline over the past two years, and the resumption of supplies will lead to further price reductions. However, it is not yet known how quickly prices will react to the increased availability and consumers will change their consumption habits.

Also, the European Commission expects the EU olive oil exports to grow by 10%, while imports will decrease by 7%, but good harvests in competing countries (Tunisia and Turkey) may restrain the trade imbalance.

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Tags: Italy, Tunisia, Turkey, EU, prices, Greece, olive oil