After experiencing volatile price spikes recently, the olive oil market is gearing up for a major turnaround, with expectations pointing toward prices possibly halving soon. The forecast stems largely from the insights of Deoleo, the world's largest olive oil producer based out of Spain. Following two challenging years marked by intense drought, the 2024-2025 olive oil season is predicted to bring significant recovery, bringing relief to consumers and producers alike.
According to industry reports, Spanish olive oil exports, particularly virgin olive oil, are showing promising growth. At the outset of 2024, export values skyrocketed, hitting USD 444.9 million just in January. This upward trend continued through to May, culminating at USD 469.7 million. The increasing demand reflects not only Spain's dominant position but also the global appetite for quality olive oil, which spans across multiple international markets.
Price volatility has been a recurring theme for olive oil. Early in the year, export prices started at around USD 9 per kilogram, with fluctuations seeing it rise to USD 9.8 per kilogram by March before settling at USD 9.3 per kilogram by May. Miguel Ángel Guzmán, Deoleo’s chief sales officer, indicated optimism about price stabilization, predicting reductions between November and January if favorable weather persists for olive harvesting.
While Spain is preparing for more bountiful yields, the Mediterranean region is facing diverse agricultural prospects. Greece is struggling with persisting drought conditions, which may affect local production, resulting in lower availability and potential price impacts. On the other hand, Turkey, which has now ascended to the position of the second-largest olive oil producer globally, is on track to achieve record yields of approximately 475,000 tonnes this coming season.
This fulfilling forecast isn't just good news for producers; it also carries significant weight for global consumers who have been coping with rising prices at grocery stores. The anticipated reduction reflects broader dynamics at play within the market, reinforcing the importance of stable harvest conditions across key production areas.
Aside from the current fluctuations and projections, the international olive oil market showcases impressive complexity. Spain's export strategy has found traction, particularly with dominant markets such as Italy, which is currently the leading importer of Spanish olive oil. During January 2024, Spain exported products valued at approximately USD 159.7 million to Italy alone. The US market is equally significant, with export values growing from USD 57.3 million at the beginning of the year to USD 77.3 million by June.
Other notable markets include France and Brazil, reflecting how Spanish olive oil remains sought after internationally even amid price hikes. The net effect of all these dynamics paints a picture of recovery and growing stability within the industry.
Deoleo’s projections highlight hope not only for farmers but also for consumers who may soon find relief at the cash register. The expectation of abundant harvests combined with the potential for stabilizing prices showcases the agility of the olive oil market. With enhanced production capabilities, strengthened supply chains, and increased consumer demand, the olive oil industry is setting its course for renewed confidence and consumption worldwide.
Alongside the forecast for price reductions, this industry transformation emphasizes the interconnectedness of agricultural practices, market demand, and global supply chains. Producing countries are likely to benefit from improved harvest yields and enhanced market dynamics, enabling them to optimize their positions within the global market framework.
