Jure Susac, a Bosnian olive farmer from the western-Herzegovinian metropolis of Ljubuski, delivers his pickings to an oil-mill in Capljina, all through harvest season, on October 29, 2022.
Elvis Barukcic | Afp | Getty Images
Spain’s Deoleo, the world’s largest olive oil producer, says one of many important tough moments throughout the commerce’s historic previous appears to be drawing to an in depth, with “liquid gold” prices anticipated to only about halve from an all-time extreme over the approaching months.
A protracted interval of climate-fueled extreme local weather and drought in southern Europe has severely impacted olive harvests in current instances, culminating in a dizzying value rally that shocked commerce veterans and consumers alike.
The shortage of olive oil, a superfood staple of the Mediterranean consuming routine, pushed the commerce into catastrophe mode, stoked meals insecurity fears and even prompted towards the legislation surge in Spanish supermarkets.
Prices have since cooled, nonetheless, as commerce estimates stage to significantly improved harvests throughout the 2024-2025 season, notably in key producing worldwide areas akin to Spain, Greece and Tunisia.
“Although there have been steps towards improvement, it would not be entirely accurate to say that the crisis is over,” Miguel Ángel Guzmán, chief product sales officer at Deoleo, suggested by means of e mail.
“We are still going through a phase of tension in olive oil prices, especially in the higher quality oils, such as Extra Virgin,” Guzmán acknowledged, noting that there’s nonetheless some market uncertainty ahead of the olive harvest for the 2024-2025 season.
“However, the outlook is positive for the coming months, as the market is expected to begin to stabilize and normality is expected to be gradually restored as the new harvest progresses and supply increases,” Guzmán acknowledged.
‘A gradual normalization’
An individual holds a bottle of olive oil on June 21, 2024, in Barcelona, Catalonia, Spain.
Europa Press News | Europa Press | Getty Images
“The relaxation of prices at origin is expected to begin between November, December and January, provided that weather and harvest conditions remain stable in the coming weeks,” Guzmán mentioned.
“Indications are that if everything develops normally, especially if rains continue to favor production, we could see a downward trend in prices throughout 2025,” he added.
Deoleo mentioned olive oil costs ought to fall to round 5 euros per liter, a steep drop from highs of 9 to 10 euros, which had develop into the norm in Spanish supermarkets this yr.
“This price would be reasonable in a context of increased production, which would ease market tensions and facilitate a gradual normalization of prices after a period marked by volatility,” Guzmán mentioned.
‘An existential threat to the industry’
Kyle Holland, senior market reporter for oilseeds and oils at Expana, mentioned most business gamers have been “very, very bearish” relating to the worth outlook.
“The production numbers are key. For Spain, we’re looking at probably 1.3 million metric tons, compared to last season’s 670,000 to 680,000 metric tons, depending on who you speak to, so not far from double basically.”
Alongside Spain, Expana’s Holland mentioned bumper olive harvests have been anticipated in Greece, Tunisia and Turkey, noting that the standard of the olives gave the impression to be “very good,” too.
“Most people are very, very bearish. They don’t see how the prices can move up with the amount of supply we have,” he added.
An aerial view of agricultural staff washing the grapes, with a combination of water, olive oil and potassium carbonate known as “posata” to make them look brighter and defend them from the burning rays of the solar in Menemen Plain of Izmir, Turkiye on August 27, 2024.
Anadolu | Anadolu | Getty Images
Deoleo’s Guzmán mentioned two consecutive years of drought has fomented concern within the business, “which is facing the need to adapt to an increasingly uncertain future due to climate change.”
In response to this problem, Guzmán mentioned the olive oil sector is present process vital investments in new agricultural applied sciences and to develop extra resilient olive varieties.
“This is crucial, as climate change has been identified as an existential threat to the industry,” he added.
