Olive Oil Monthly Market Report – August, 2022

Buying recommendations by Certified Origins

By Franziska Finck — August 17, 2022

 

What’s happening this month?

The record heat temperatures and extended draughts experienced in Europe and the Mediterranean are increasing tension and concerns in the food market over future crops. Olive oil trading prices are trending with unprecedented spikes, pushing many operators and producers to halt transactions momentarily. Luckily the thirst for the healthy properties of Extra Virgin Olive Oil and its derivatives remains also sustained, with recent reports showing an increasing consumption.

 

The situation in Spain and Italy

The continuous lack of rain is afflicting olive groves in Southern Europe and the Mediterranean, causing wildfires and extreme drought. Crops from high-intensive olive farms requiring constant artificial irrigation are the most affected. The trees from medium and low-intensive farms, relying primarily on rainwater, also show signs of damage and stress.

 

Forecast from California

In 2021/22, California produced approximately 14,000 Tonnes of Olive Oil, providing a fraction of the Oil consumed in the USA, still mostly imported from the Mediterranean. Despite the continuous efforts of the North American farmers to increase production and quality in this fertile region, the Olive Oil Commission of California expects a drop of 43% for the next crop caused by harsh climate conditions.

 

Price and Market Situation

The difficult weather conditions and continued global economic and political uncertainty translated into an unstable olive oil market. We observed record transactions with evaluations as high as 3.90 Eu/kg for conventional (non-organic) Extra Virgin Olive Oil in Spain and 4,90 Eu/Kg for the same grade in Italy. This situation of uncertainty and tension will push many olive oil traders and buyers to halt operations and wait, hoping for more favorable conditions. In August, most of Europe’s olive oil mills and bottling plants are running at low capacity or shut down completely. The updated forecasts on Olive crops in September will be crucial to understanding future market trends

 

 

 

Growing consumption of Olive Oil

According to a report published by the European Commission, demand for Olive Oil and Extra Virgin Olive Oil keeps growing, despite inflation and higher retail prices. With retail and food service as the main drivers, projections for 2023 in Europe set consumption growth at 11% higher than in previous years.

 

Sources:

International Olive Council

European Union

Olive Oil Times

Olimerca

 

Franziska Finck

is a Sales Manager at a Certified Origins company. She is a German native who has lived in Spain for over 15 years. She vividly remembers being introduced to the world of Mediterranean products – immediately falling in love with their food culture. This led her to work in the food industry in international exports, bringing her passion and conviction for good, natural, and healthy food to the world.

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