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Global olive oil production is recovering in 2024/25, with Spain's Andalusia region alone expected to produce 1 million metric tons (mmt), a 77% increase from the previous season. Driven by improved harvests in Spain, Greece, Portugal, Tunisia, and Türkiye, global output is forecast to reach 3.4 mmt, up from 2.6 mmt in 2023/24. This surge has halved wholesale prices from Feb-25's peak of over USD 10,000 per metric ton (mt) to USD 4,250 per ton, signaling relief for consumers as retail prices begin to decline.
However, inventories remain at historic lows, and structural demand growth fueled by the Mediterranean diet's global popularity limits further price drops. Consumption has surged in markets like the United States (US), with an increase of 300% over 30 years in the US and 1,100% over 34 years in the United Kingdom (UK) since 1990. While the immediate crisis has eased, sustained demand and limited supply suggest that a return to pre-crisis price levels is unlikely.
Brazilian olive oil prices, which peaked in Jun-24 due to supply constraints caused by severe droughts in Europe, are expected to decline by over 20% in 2025. The country relies heavily on olive oil imports, with 44% sourced from Portugal and 14% from Spain. Improved olive oil production in the Mediterranean basin, projected to rise by 29% in the 2024/25 harvest season, is already lowering European prices, with Spain reporting a 20% price drop in Nov-24.
Experts predict the impact on Brazilian prices will become evident by mid-2025, as logistics and existing stock delays slow the price adjustment. Starting around Easter, more affordable European olive oil is anticipated to reduce prices significantly in Brazil, benefiting consumers after a prolonged period of high costs.
A recent analysis by Spain's Organization of Consumers and Users (OCU) of 23 extra virgin olive oils (EVOO) confirms significant quality improvements in the category. For the first time, all tested oils met the stringent requirements for "extra virgin" classification, including low acidity and sensory analysis with no defects, marking a departure from prior studies that revealed fraud in some products.
Notably, distributor-brand (white-label) oils achieved comparable quality to leading brands, with five white-label brands ranking among the top 10 products. These oils also offer a cost advantage, averaging USD 1.54 per liter (EUR 1.50/L) less than premium brands. This shift in quality and pricing, alongside a decline in olive oil prices, may stimulate recovery in consumption, which dropped by 24% year-on-year (YoY) in 2024.
Türkiye's olive sector is poised for record production in 2024/25, targeting 475,000 mt of olive oil and 750,000 mt of olives, with export revenues expected to reach USD 1 billion. Over the next five years, the sector aims to increase annual olive oil exports to 200,000 mt and olive exports to 100,000 mt, generating USD 1.5 billion in foreign revenue. Key markets include Spain, Italy, and the US, while olives are mainly exported to Germany, Romania, and Iraq.
Imposed to stabilize domestic markets, recent government restrictions on bulk olive oil exports reduced exports by 52% in 2023/24, causing USD 202.5 million in losses. The now-lifted restrictions hindered international market growth. As production surges, concerns remain about securing sufficient global demand. However, efforts are underway to secure duty-free access to markets like the European Union (EU) and the UK.
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Italy's olive oil prices have risen to USD 11.45 per kilogram (kg) in W1, marking a 14.04% increase week-on-week (WoW) and a 10.74% rise YoY. This price surge is primarily driven by production challenges, including summer droughts, autumn rains, and labor shortages, which have reduced yields.
Greece's olive oil prices rose to USD 4.53/kg in W1, marking a 6.59% WoW increase but a significant 53.44% YoY decline from USD 9.73/kg in 2024. This substantial decrease reflects market pressures, including the EU's allowance of duty-free Turkish olive oil imports, which have weakened domestic prices.
Türkiye's decision to lift restrictions on bulk olive oil exports further reduced producer prices in Greece, adding competitive strain. In addition, rising production costs, particularly labor wages, exacerbate challenges for Greek producers. These dynamics may limit price recovery in the short term while posing long-term risks to the profitability and competitiveness of Greek olive oil on international markets.
Tunisia's olive oil prices remained stable at USD 4.30/kg in W1 but recorded a significant 16.99% month-on-month (MoM) decline. This price drop aligns with improved global yields, contributing to a 32% projected increase in global production for the 2024/25 season, easing market pressures and benefiting consumers.
However, challenges persist for Tunisia. Recent criticism from the Tunisian Union of Agriculture and Fisheries (UTAP) highlighted inflated production figures, poor marketing, and low export prices, which have weakened Tunisia's competitive edge against major producers like Spain and Italy. Without balanced sales strategies and better pricing mechanisms, Tunisia risks undermining its potential financial returns despite contributing to the global supply recovery. This dynamic may create downward pressure on prices in the short term while posing long-term challenges for maintaining market competitiveness.
Major producers like Spain, Türkiye, and Tunisia should leverage the 2024/25 production recovery to expand exports to high-demand markets such as the US, UK, and Brazil. Collaborative efforts with trade associations to secure duty-free agreements and promote high-quality, competitively priced olive oils can enhance market share and revenue in these regions.
Retailers and producers should emphasize the quality and affordability of distributor-brand extra virgin olive oils, which have shown comparable standards to premium brands at lower prices. Marketing campaigns highlighting these benefits can drive consumer interest and support recovery in consumption, particularly in markets where demand has declined.
Sources: Tridge, Oli Merca, Ukragroconsult, News Foodmate, African Manager
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