World’s largest olive oil producer says Spain’s Deulio, the world’s largest olive oil producer, says one of the most challenging moments in the industry’s history appears to be coming to an end.
A prolonged period of extreme weather and climate-driven drought in southern Europe has severely impacted olive harvests in recent years, sending prices soaring and shocking to industry veterans and consumers alike.
But prices have since slowed, with industry forecasts pointing to a much better harvest in 2024-25, particularly in key producing countries such as Spain, Greece and Tunisia.
Spain’s Diolio, the world’s largest olive oil producer, says one of the most challenging moments in the industry’s history appears to be coming to an end, with prices for “liquid gold” set to nearly halve from their all-time high in the coming months.
A prolonged period of extreme weather and climate-driven drought in southern Europe has severely impacted olive harvests in recent years, sending prices soaring and shocking to industry veterans and consumers alike.
The shortage of olive oil, a staple of the Mediterranean diet, has pushed the industry into crisis mode, sparking fears of food insecurity and even leading to a rise in crime in Spanish supermarkets.
But prices have since slowed, with industry estimates pointing to a big improvement in the 2024-25 harvest, particularly in major producing countries such as Spain, Greece and Tunisia.
“Despite the steps taken towards improvement, it would not be entirely accurate to say that the crisis is over,” Miguel Angel Guzman, chief sales officer at Diulio, told CNBC via email.
“We are still experiencing a period of tension in olive oil prices, especially in high-quality oils, such as extra virgin olive oil,” Guzman said, noting that there is still some uncertainty in the market ahead of the 2024-25 olive harvest.
“However, the outlook is positive for the coming months, as the market is expected to begin to stabilize and normality is expected to gradually return as the new harvest progresses and supply increases,” Guzman added.
‘Progressive normalization’
Diolio, the maker of household olive oil brands such as Bertolli and Carbonell, described the perfect storm of challenges as “one of the most difficult moments in the history of the sector” over the summer and called for a “profound transformation” of the industry.
Expana, a marketing intelligence firm focused on agriculture and food, said that extra virgin olive oil prices in Spain’s Andalusia region were at €6 ($6.33) per kilogram as of November 6. This represents a decrease of about 19% on a monthly basis and about 35% from the record high of 9.2 euros in January.
Spain accounts for more than 40% of the world’s olive oil production, making it a global reference for prices.
“The price relief at origin is expected to start between November, December and January, provided that weather and harvest conditions remain stable in the coming weeks,” Guzman said.
“Indications are that if everything goes normally, and especially if rains continue to support production, we could see a downward trend in prices throughout 2025,” he added.
Deulio said olive oil prices were expected to fall to around €5 per litre, a sharp drop from the highs of €9-10 that have become the norm in Spanish supermarkets this year.
“This price will be reasonable in the context of increased production, which should ease market tensions and facilitate a gradual normalization of prices after a period of volatility,” Guzman said.
‘Existential threat to the industry’
Kyle Holland, senior market correspondent for oilseeds and oils at Expana, said most industry players were “very pessimistic” about the price outlook.
“The production figures are key. “For Spain, we’re looking at 1.3 million metric tons, compared to 670,000 to 680,000 metric tons last season, depending on who you talk to, so it’s not far off double basically.”
Besides Spain, Hollande of Expana said that ample olive harvests are expected in Greece, Tunisia and Turkey, noting that olive quality also looks “very good.”
“Most people are very pessimistic,” he added. “They don’t see how prices can go up with the amount of supply we have.”
Two consecutive years of drought have raised concerns in the industry, “which is faced with the need to adapt to an increasingly uncertain future due to climate change,” said Guzman of Diolio.
In response to this challenge, Guzman said the olive oil sector is seeing significant investment in new agricultural technologies and the development of more resilient olive varieties.
“This is critical, as climate change has been identified as an existential threat to the industry,” he added.
