Italy is facing a pressing crisis concerning its olive oil market, largely attributed to the alarming rate of abandoned olive groves across the country. According to recent research by the National Consortium of Olive Growers, it was revealed there are 500,000 abandoned hectares out of 1.1 million total hectares dedicated to olive farming. During the last decade, between 2010 and 2020, the number of olive-farming companies saw a steep decline of 31%, even though the land area remained relatively stable. Abruzzo is particularly affected, experiencing a staggering 37% decrease in olive farming businesses, as reported by ISMEA's Olive Oil report from February 2023.
To combat this concerning trend, legislation aimed at reducing the abandonment of agricultural and olive-growing lands was recently approved. The initiative, supported by the Association of Olive Cities and promoted by Honorable Pino Bicchielli within the scope of the Environment Decree, is expected to address the dire consequences of agricultural land abandonment and its subsequent impact on hydrogeological stability.
Michele Sonnessa, the president of the Olive Cities Association, celebrated the approval as “a significant milestone resulting from synergistic work,” recognizing the major contribution made by Olive Cities to the legislative process. He emphasized the importance of the agricultural land, identifying the abandonment crisis as an urgent priority, particularly through numerous initiatives planned for 2024 aimed at reversing this troubling trend. These include the establishment of technical tables dedicated to drafting legislative proposals against olive abandonment, national marches against abandonment during community events, and pilot projects aimed at recovering abandoned olive groves, with collaboration from Tuscany's ANCI and local territorial entities.
Sonnessa asserted, "There is constant growth of abandonment across most of the national territory, which is why we have strongly advocated for the implementation of strategic recovery plans for abandoned olive groves." He noted the cultural significance of olive trees, labeling their preservation as integral to the survival of local olive-growing communities. He also pointed out the necessity of tackling environmental crises, climate risks, wildfires, and biodiversity conservation through olive cultivation.
Meanwhile, the economic aspects of the olive oil market portray contrasting trends. The wholesale price of Italian extra virgin olive oil has been on the rise, distancing itself from the fluctuations seen within the Spanish and Tunisian markets. According to Graziano Alderighi from December 17, 2024, this year has marked the breaking of the traditional price correlation between Italian olive oil and its Spanish counterpart. Italy's olive oil prices have approached nearly 10 euros per kilogram, whereas Spanish olive oil has seen its prices plummet below 4 euros per kilogram.
This year's price differential has soared beyond 5 euros per kilogram and is nearing 6 euros, largely due to the remarkable rise of Italian olive oil prices across regions like Puglia, Calabria, and Sicily, which report values ranging from 9.5 euros per kilogram and higher. Conversely, the decline has echoes across Spain, where the industry contends with prices below 4 euros per kilogram, posing serious challenges for producers.
Price reports reveal fluctuations across the Italian market, with Bari's prices reported at 9.3 euros per kilogram from the Oil Borsino as of December 16. Meanwhile, Calabria's local brands DOP Lamezia and Bruzio are fetching increased prices of 9.9 and 9.6 euros per kilogram, marking significant growth over previous weeks. Sicilia also follows this positive trend, with the DOP Val di Mazara priced at around 10.23 euros per kilogram, reflective of the steady price increase over recent months.
Conversely, the Spanish agricultural sector faces mounting discontent as the price of extra virgin olive oil sinks perilously low. Spain's Minister of Agriculture estimates production at 1.3 million tonnes, but prices for olive oil have sharply declined to 4 euros per kilogram, leading to concerns about unsustainable market dynamics. Such conditions have resulted in contracts being offered at rates much lower than the production costs, creating tension between the agriculture and industrial sectors of the olive oil market.
Recent trends indicate the industry is locked in competition between olive oil production realities and consumer pricing pressures, with Spanish producers expressing frustration. Comparisons drawn to Italy remind observers of the early 2000s when similar pricing dynamics led to clashes between the farming community and oil industries.
While the laws and strategic initiatives introduced may support Italy's olive oil revival, the country also leans upon its strong market position. The olive oil industry will need to maintain its momentum, not just for economic health but to support the environment and heritage linked with centuries of olive cultivation.
