On Oct. 29, 2022, Bosnian olive grower Jevor Susak from the town of Lubovci, western Herzegovina, delivers his olives to an oil mill in Kapiljena, during the harvest season.
Elvis Barokchuk | AFP | Getty Images
One of the most difficult moments in the industry’s history appears to be on the horizon, with prices for “liquid gold” in the coming months, says Spain’s Deloitte, the world’s biggest olive oil producer. Duran will be about half of its all-time high.
Climate-fueled extreme weather and long periods of drought in southern Europe have hit olive crops hard in recent years, resulting in a dizzying price rally that has industry veterans and consumers alike. Equally shocked.
A shortage of olive oil, a superfood staple of the Mediterranean diet, has pushed the industry into crisis mode, fueled fears of food insecurity and even led to an increase in crime in Spanish supermarkets. .
However, prices have since cooled, as industry estimates point to significantly improved harvests in the 2024-2025 season, particularly in key producing countries such as Spain, Greece and Tunisia.
“Although steps have been taken to improve, it would not be entirely accurate to say that the crisis is over,” Miguel Angel Guzman, chief sales officer at Dulio, told CNBC via email.
“We are still going through a phase of tension in olive oil prices, especially in high-quality oils like extra virgin,” Guzmán said, noting that olives for the 2024-2025 season There is still some uncertainty in the pre-harvest market. .
“However, the outlook for the coming months is positive, as the market is expected to begin to stabilize and normalcy is expected to gradually return as the new crop develops and supplies increase,” Guzman said.
‘gradual return to normal’
Deoleo, maker of domestic olive oil brands such as Bertolli and Carbonell, described a perfect storm of challenges over the summer as “one of the most difficult moments in the sector’s history” and called for a “profound transformation” of the industry. .
According to Expana, an agricultural and food-focused market intelligence firm, extra virgin olive oil prices in Spain’s Andalusia were 6 euros ($6.33) per kilogram as of Nov. 6. That’s down about 19 percent on a month-on-month basis and about 35 percent off the high of 9.2 euros in January.
Spain accounts for more than 40% of the world’s olive oil production, making it a global reference for prices.
A man holds a bottle of olive oil on June 21, 2024 in Barcelona, Catalonia, Spain.
Europa Press News | Europa Press | Getty Images
“The actual easing of prices is expected to begin between November, December and January, provided the weather and harvest conditions remain stable in the coming weeks,” Guzman said.
“Indications are that if everything develops normally, especially if rains continue to favor production, we may see a downward trend in prices during 2025,” he added.
Olive oil prices should fall to around 5 euros a litre, down from the highs of 9 to 10 euros that became the norm in Spanish supermarkets this year, Diolio said.
“This price will be appropriate in the context of increased production, which will reduce market stress and facilitate a gradual normalization of prices after a marked period of volatility,” Guzmán said.
‘An existential threat to the industry’
Kyle Holland, senior market reporter for oilseeds and oils at Expana, said most industry players were “very, very bearish” on the price outlook.
“The production numbers are significant. 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 talk to, basically. Not more than twice as far.”
As well as Spain, Expana’s Holland said bumper olive harvests were expected in Greece, Tunisia and Turkey, noting that olive quality also appeared to be “very good”.
“Most people are very, very bearish. They don’t see how prices can go up with the supply we have,” he added.
An aerial view of agricultural workers washing grapes with a mixture of water, olive oil and potassium carbonate known as “posata” to make them look bright and burn in the sun’s rays on Aug. Save them from , 2024.
Anadolu | Anadolu | Getty Images
Two consecutive years of drought have raised concerns in the industry, “which is faced with the need to adapt to an increasingly uncertain future due to climate change,” said Guzman of Diolio.
In response to this challenge, Guzman said the olive oil sector is investing significantly in new agricultural technologies and developing more resilient olive varieties.
“This is very important, because climate change has been identified as an existential threat to the industry,” he added.
