Spain is running out of olive oil

World prices for olive oil are rising rapidly as its reserves are depleted in Spain - the world's largest exporter, which in 2021 provided 46% of the world's exports of this product. According to Mintec analysts, the price of the first cold pressed oil - extra virgin from Andalusia (where 80% of Spanish oil is produced) increased by 115% during the year, from €3.83/kg to a record €8.2/kg.

In July, the country's olive oil stocks decreased by 73-75 thousand tons, and now producers have about 151 thousand tons left. If the rate of reduction of stocks does not change, they will not be enough until October, when the new harvest begins.

According to the International Olive Council, in 2022/23 due to a severe drought in the main producing countries, the world production of olive oil decreased compared to the previous season from 3.5 million tons to a 6-year low of 2.73 million t, in particular in Spain - from 1.49 to 0.78 million tons, and in Italy - by 40% to 235 thousand tons.

According to the estimates of the International Monetary Fund, in April world prices for olive oil reached a maximum for 33 years of observation - $6,269/t and continued to grow. In June, they amounted to $7,200/t. Experts believe that prices may exceed €10,000/ton in the coming months.

In the current season, the olive harvest in Spain will be low, so oil production will not exceed 700,000 tons, Mintec reports. A second consecutive year of low harvest could lead to bankruptcy of many producers.

In other olive oil exporting countries, Greece and Italy, there is also a drought, which has a negative impact on the olive harvest. Therefore, the total production of olive oil in the EU in the current season may amount to only 1.3-1.45 million tons, compared to the 5-year average of 2.1 million tons.

The increase in olive oil prices was helped by Turkey's decision in August to freeze its exports until November 1 to slow domestic price growth. From November 2022 to July 2023, the country increased its export of olive oil by 240% to 136.5 thousand tons, as a result of which its prices rose by 102%.