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The European Commission (EC) forecasts a 29% year-on-year (YoY) increase in the European Union (EU) olive oil production for 2024/25. Greece is expected to produce 250,000 tons, a 43% YoY increase. Spain’s production is expected to reach 1.29 million tons, a 51% YoY increase. Portugal is expected to reach 190,000 tons, a 21% YoY rise, while Italy faces a decline of 32% YoY to 224,000 tons. Non-EU countries are also projected to see growth, with Turkey leading at a 104% YoY increase to 450,000 tons and Tunisia at a 55% increase to 340,000 tons. Conversely, Morocco's production is expected to decrease by 15% YoY to 106,000 tons.
The International Union for Conservation of Nature (IUCN) conducted a study on olive groves' sustainability in Spain, Italy, Greece, and Portugal, comparing them to other oilseed crops. It emphasized the importance of adopting a holistic approach to olive oil production, addressing its environmental, economic, and social impacts. The study found that while traditional olive groves support higher biodiversity, they yield less, whereas intensive and super-intensive practices increase land use but have a smaller biodiversity impact. Olive groves are water-intensive, and climate change poses a significant risk to production, especially in Spain. The IUCN highlighted the potential of polyculture and cover cropping to enhance biodiversity and soil quality, with EU subsidies encouraging these sustainable practices. The report advocates for the transition to organic farming and eco-friendly methods to reduce the environmental footprint of olive oil production.
Greek olive oil prices are expected to decrease in 2025 due to a significant increase in 2024 production. After prices surged in 2024 following a poor 2023 harvest, wholesale prices are expected to drop in the upcoming year. Despite this drop, retail prices are expected to remain high, ranging from USD 10.53 to 14.75/L (EUR 10 to 14/L). Production increased by 43% YoY in Greece in 2024 to 250,000 tons, which contributed to the lower prices, but Greek olive oil remains the most expensive in retail. Consumer demand in Greece has fallen by 26.7% YoY due to the high retail prices, and there are hopes that the price reduction will restore consumption.
The Portuguese Food and Economic Security Authority (ASAE) seized products worth USD 86,899 (EUR 82,500) during a control operation in Aveiro and Bragança. The operation targeted a warehouse and industrial unit falsely labeling edible oils as olive oil without proof of origin. Authorities confiscated 16,500 liters (L) of mislabeled oil and 82,819 incorrect labels., Prompted by a surge in olive oil fraud linked to rising costs due to climate impacts, the action resulted in two criminal cases. ASAE plans to intensify controls nationwide to combat such deceptive practices.
Spain's olive oil sector anticipates a production recovery in 2024/25, with an estimated 1.29 million tons attributed to favorable cultivation conditions following recent rainfall. Domestic consumption is expected to rise by 17% YoY to 480,000 tons, while exports may grow by 32% YoY to 980,000 tons. Table olive production in Spain has also exceeded initial forecasts, reaching 481,000 tons in the first two months of the season, driven by autumn rains that improved quality and size. For the full campaign, domestic sales are projected at 190,000 tons, a 1% rise, and exports at 275,000 tons, a 3% increase, compared to the previous season.
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Spanish olive oil prices dropped to USD 5.61 per kilogram (kg) in W49, marking a week-on-week (WoW) decrease of 2.26%, a month-on-month (MoM) decline of 11.93%, and a YoY drop of 34.08%. These reductions are driven by a forecasted production surge to 1.29 million tons for the 2024/25 season, a 51% YoY increase, supported by favorable autumn rainfall that enhanced yields. While domestic consumption is expected to grow 17% YoY and exports 32% YoY, the steady production recovery in Oct-24 and Nov-24, has eased supply constraints, exerting downward pressure on prices.
Italian olive oil prices rose significantly, increasing to USD 10.56/kg in W49, reflecting a WoW rise of 9.66%. Prices surged 29.41% MoM from USD 8.16/kg in W46, and up 9.54% YoY from USD 9.64/kg in W49 2023. This sharp price escalation is primarily driven by a projected 32% YoY production decline to 224,000 tons for the 2024/25 season, attributed to alternating production cycles and climate change impacts. Additionally, Italian producers face elevated production and pressing costs, further contributing to the upward price pressure in the market. Prices are expected to remain high in the upcoming months as supply remains constrained.
Tunisia's olive oil prices showed relative stability on a weekly basis, with a marginal WoW increase of 0.35%, rising to USD 5.73/kg in W49. However, MoM prices experienced a significant decline of 21.51% from USD 7.30/kg in W46 2024. This drop aligns with increased olive oil production across key Mediterranean countries, leading to heightened competition among exporters. The surplus supply has exerted downward pressure on prices, reflecting intensified competition in global export markets.
To enhance production resilience in olive oil production, producers should adopt climate-resilient practices such as cultivating drought-resistant olive varieties like Arbequina and Koroneiki, and employing advanced irrigation systems like drip irrigation to optimize water usage. Incorporating polyculture systems and cover cropping can improve soil fertility and water retention while supporting biodiversity to reduce vulnerability to climate fluctuations. Precision agriculture technologies, including remote sensing and IoT-based tools, can monitor weather, soil, and crop conditions for timely interventions. Additionally, leveraging EU subsidies and green financing can support these adaptations, while collaborative knowledge-sharing initiatives and farmer training programs ensure widespread adoption of sustainable practices.
To embrace sustainability in olive oil production, producers should prioritize adopting practices that minimize environmental impact while improving resource efficiency. This can include transitioning to organic farming methods to reduce pesticide use, implementing water conservation techniques like drip irrigation, and utilizing cover crops to enhance soil health and biodiversity. Incorporating polyculture, as advocated by the IUCN, can also reduce land-use intensity and support higher biodiversity in olive groves. Furthermore, leveraging EU subsidies for sustainable practices can incentivize the shift towards eco-friendly production methods. Another key approach is optimizing the energy efficiency of mills and reducing carbon emissions through the use of renewable energy sources. Collectively, these measures would not only improve the environmental footprint but also align with the growing consumer demand for sustainably sourced products, boosting market positioning in a competitive industry.
Sources: Tridge, Agro Digital, Agro Typos, Food Fakty, Greek Reporter, Revista Campo ES, Olive Oil Times
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