Olive Oil Market - Prices Soar to Uncharted Highs
The olive oil market has undergone a remarkable price surge with the Mintec Benchmark for extra virgin olive oil from Andalusia [Mintec Code: 8G39], surpassing the previous record of €8.50/kg. After declining to €7.80/kg in November 2023, prices for the Mintec Benchmark Price have rebounded to €9.20/kg as of 5Th January 2024, which is an all-time high according to Mintec's data spanning some 20 years.
This escalation can be attributed partly to low production estimates stemming from poor early yields in major producing countries like Spain, Italy, and Greece. Initial production estimates for Italy by market players had projected 290,000 metric tonnes of output for the 2023/24 marketing year, significantly lower than the past five years’ average—a decline linked to persistent drought conditions. Greece faces similar challenges and industry insiders anticipated around 160,000 tonnes of production in 2023/24 from 340,000 metric tonnes the previous year.
However, recent revisions indicate a bleaker picture, with Greece potentially producing 120,000 metric tonnes and Italy at 250,000 metric tonnes of olive oil—a significant decline from what would already be poor production.
Spanish estimates for olive oil production were initially around 750,000 metric tonnes when submitted to Mintec although have since been scaled back. Most industry insiders now forecast Spanish production at 700,000 metric tonnes or lower. Despite surpassing last season's 630,000 metric tonnes, industry players caution that the absence of substantial carryover from the old crop could result in similar or even diminished supplies compared to the previous year, which would be a “disaster” a trader commented to Mintec.
Adding to this bullish sentiment, there's a shortage of oils in both producer and user warehouses. Buyers competing for limited volumes are intensifying upward price pressure. Some sellers had postponed sales in December 2023, waiting for further price increases in the new year. While Mintec has heard they may decide to sell imminently, it remains uncertain whether this trickle of supply will meet market demands.
In light of these unprecedented challenges in production and the growing scarcity, the olive oil market foreshadows a complex and dynamic landscape in the coming weeks.
For further insight join us for our upcoming webinar, "Steering the Olive Oil Landscape - Supply, Quality, and Sustainability Insights." Our Mintec market reporters will delve into challenges in the olive oil market, providing valuable insights to help you navigate the changing market dynamics. Don't miss out – register now to secure your spot!
