We will have to wait until the end of this month or early October when the Andalusian government publishes the capacity data for the 2023/24 olive harvest to see how the price of olive oil develops in the markets. This is explained by the acting Minister of Agriculture Luis Planas. “It is still too early to say,” Planas said in response to questions from journalists before the informal meeting of EU agriculture ministers held in Córdoba on the 5th of this month. However, initial estimates in the industry suggest that there may be a slightly larger harvest in Spain than in the current campaign, but still there will be less oil available to the market via the connection.
The campaign now being marketed was the worst of the century, with 680,000 tonnes in Spain. Less than half of 2021/22, when 1.4 million tonnes were reached. The markets in Spain had the 680,000 tonnes of production available, as well as an additional 463,000 tonnes left over from the previous campaign. With more than 1.12 million tons on the market during the campaign, a situation close to a shortage has arisen in recent months and the price of the product has risen inexorably to over 10 euros per kilo.
Estimates
Cooperativas Agro-alimentarias de Andalucía, which concentrates two-thirds of regional production in its members, with Andalusia accounting for more than 80% of Spain’s total, already estimated production of around 730,000 tonnes for Spain this summer. Experts like analyst Juan Vilar also estimate between 700,000 and 750,000 tons. That means a little more production than last season. Practically the entire industry agrees with this forecast of “a little more than last year”.
And despite this slightly higher harvest than recently, initial calculations indicate that there will be less oil on the market. It is estimated that the link (the amount of oil available on October 1, the official launch date of the new marketing campaign) will be around 200,000 to 220,000 tonnes in the best case scenario (stocks were at 320,000 tonnes at the end of August). . Despite the prices, the output volume in the last few months has been between 80,000 and 100,000 tonnes.
The current inventory is 320,000 tons and the monthly shipping rate is between 80,000 and 100,000
That is, with a connection of 200,000 tons of oil between campaigns and a harvest between 700,0000 and 750,000 tons, the market will not even have a million tons of Spanish product (between 40 and 50% of production worldwide, according to campaigns), itself take care of.
Board capacity is usually the most reliable estimate. Although it is not infallible. Last year the official forecast was below actual production. Olive growers agree with Minister Planas on the risk of making early estimates. A rainy September and October, right at the time of lipogenesis (when the olive tree converts the water in the fruit into oil), can increase fat yield. “A few points more yield could be more than 70,000 tons of oil,” indicate the sources consulted in the olive grove.
New oil
Little new oil will come onto the market in Spain in October and until mid-November. The ultra-early and early harvest is reserved for the gourmet market and, despite its boom, only represents between 1 and 2% of the total sales volume. However, in Portugal’s Algarve, a rising power, harvest can begin in just a few weeks, in October.
In Spain, the harvest probably won’t be widespread until November, assuming there are farmers who can dare to wait for winter rains to fatten up the fruit on the trees.
Global market
On the world market, Juan Vilar estimates that production could be between 2.55 and 2.60 million tons. Virtually all major producing countries (in the Mediterranean region) are affected by drought, with production below their historical averages.
So the tensions over the prices of oils (extra virgin, virgin and lampante oil) will continue for some time. This pressure is influenced by supply and expectations. If the autumn is rainy, the possibility of a good harvest in the 2024/25 season will somewhat ease tensions in the markets until spring confirms this.
Care for olives
Current prices worry consumers, but they do not compensate olive growers who are already complaining about the poor harvest they will reap. The agri-food cooperatives of Jaén expect that the province’s manufacturing sector will earn 1,000 million euros less next season than in a normal production season, which will have a direct impact on employment with a wage cut of 150 million euros.
For their part, the agricultural and food cooperatives of Granada expect that the harvest in the province will decrease by 51% compared to an average campaign.
It is also the second year in a row with very poor harvests, putting producers in a very complicated situation in a key sector for the economy of more than 300 Andalusian municipalities.
