In 2019, total imports of olive oil and pomace exceeded 600 thousand tons (+9.5%) in Italy. The purchases’ value decreased by 1.4 billion euros (-13%), due to the global prices reduction. Exports grew slightly in volume (+1%,339 thousand tons) for a value of 1.37 billion euros (-8.5%).
During 2019/20 campaign, Italian production was more generous than expected even if this is not enough to define it as abundant. ISMEA estimates a production of 365 thousand tons, more than double compared to the previous year (175 thousand tons). All over the world, however, production figures seem to be lower (-5% on 2018/2019): a decline due to opposite situations, inside and outside the EU.
European production has fallen significantly due to Spain, whose production reached 1.16 million tonnes dropping by -35% YoY. Greece’s production, on the other hand, is growing albeit at a lower rate than expected at the beginning of the harvest. Other countries productions are growing as well. First of all Tunisia (300 thousand tons, +150% in volume compared to last year), and Turkey (+36%).
HOW STOCKS OFFSET THE FALL IN PRODUCTION
The world production, however, has been somewhat offset by very high stocks, especially in Spain, which have calmed the market. Global prices, in fact, have continued their downward phase as well as Italian olive oil prices after last year’s spikes due to the drastic drop in production. In the first quarter of 2020, the Italian extra virgin olive oil prices show a considerable reduction compared to last year’s (-44%). This reduction is not due to the current health crisis.
The current average price, 3.11 euros per kilo, of Italian extra virgin olive oil should be compared to 5.54 euros per kilo in March, 2019, while Spanish olive oil currently stands at 2.11 euros per kilo compared to 2.64 in 2019. Prices reduction actually began significantly at the beginning of last summer, intensifying in the autumn with the opening of the oil mills. This has allowed bottling companies to buy at convenient prices both in Italy and abroad. Now, with the Covid-19 crisis underway, oil mills and companies do not seem to have any particular supply problems. At the moment, the market has stopped because of the presence of stocks in the distribution chains.