The prices of extra virgin olive oil in Europe fluctuate just like stock market quotations, with significant daily fluctuations and the speculative dynamics typical of financial markets. Quotations indicate an average price of 7.9-8 euros/kg for Italian extra virgin olive oil, with prices even exceeding 8.3 euros/kg for the best quality olive oils.
In Spain, quotations are lower on average, at 6.9 euros/kg for standard extra virgin, while for a good quality extra virgin consumers have to spend at least 7.2-7.3 euros/kg.
The market is more complicated in Greece, where stocks are at their lowest, trade is very limited, and quotations are in line with those in Spain for medium-low qualities, as all the fruity extra virgin product has been sold in recent months. Quotations are 6.7-6.8 euros/kg, but many are betting that seven euros/kg will be exceeded.
Sales in Italy and Spain are also stagnant, as prices have probably not yet reached their peak, which could come in September. However, it should be noted that extra virgin olive oil stocks are finished and the new oil campaign remains below expectations in terms of volumes.
THERE WILL NOT BE ENOUGH EXTRA VIRGIN OLIVE OIL FOR EVERYONE
In Spain, the heat and drought are affecting the setting and development of the olives, so much so that, to be optimistic, the harvest will not exceed 800,000 tons.
The first indications from Tunisia are also negative: 200,000 tons should not be reached, as well as in Turkey. In Greece, where last year’s campaign achieved 360,000 tons, a harvest of no more than 200,000 tons is expected. The only country that may buck the trend in the Mediterranean is Italy, where production is expected to exceed 300,000 tons.
The main problem, however, is stocks that are expected to fall to zero in all Mediterranean markets. In Greece and Tunisia, stocks are already at their lowest, while in Spain they stood at 289,000 tons on May 31 and are expected to fall to zero by mid-October. Italy’s stocks are also expected to be close to zero in the same period.
By then, the olive oil campaign will be in its opening lines. Those who are still waiting to sell their stocks are betting on a further rise in prices of 30-50 cents.
IMPACT ON CONSUMPTION
The consumption trend is falling by around -20/-30% in almost all markets, but not enough to keep prices in check. The impact of these price increases is not yet visible in the supermarkets because the contracts, often signed at the beginning of the year, impose fixed adjustment thresholds that are far below the price increases in the wholesale market.
The impact of the price increases on consumption will therefore only be seen when the contracts with the large retailers are renewed for 2024. Without forgetting that next year there will not be enough extra virgin olive oil to meet the current demand.