PARIS (Reuters) – Olive oil supply in Europe is set to rise sharply in the year ahead as top producer Spain recovers from drought, though it was unclear if households hurt by record prices will revert to the Mediterranean speciality, the European Commission said.
European Union production of olive oil is forecast to reach 2 million metric tons in 2024/2025, up 31% from last season and 9% above the five-year average, the Commission said in an agricultural outlook report on Tuesday.
A steep increase in Spanish output, along with a rise in Greece and Portugal, should outweigh a less favourable crop year in Italy, it said.
Spain’s 2024-2025 olive oil production is projected to rise 48% to 1.26 million tons, according to a farm ministry forecast released last week. Spring rain boosted early growth of olives, though weather in the coming weeks will be crucial for the final harvest level, it said.
Drought and heatwaves in the previous two years slashed Spanish production, doubling olive oil prices to record levels and leading households to buy more sunflower oil than olive oil in the first half of 2024 in an abrupt change in consumption patterns.
EU-wide consumption was forecast to rise by 7% in 2024/2025, after dropping 22% over the past two years, with the expected supply recovery likely to extend a recent easing in prices, the Commission said.
“The main uncertainty for 2024/25 is how quickly prices will adapt to increased availability and how consumers will react after having changed consumption habits due to the high prices,” it said.
EU olive oil exports were expected to rise 10% and imports fall by 7%, but strong harvests in price-competitive producers Tunisia and Turkey could curb trade rebalancing, the Commission added.
(Reporting by Gus Trompiz in Paris and Emma Pinedo in Madrid; Editing by Ros Russell)
Comments