February 2019 - E.V.O.O. market report: The markets are in hibernation

Harvesting has finally concluded in all olive producing countries and everybody is waiting for the demand trends of the new olive oil to start taking shape.

Spain’s production in particular, as we have already mentioned in our previous articles, is estimated to above 1,55 million tons. This quantity has the potential to blow the prices to even lower levels although they appear to have stabilized around the 2,85€/Kg spot for the good quality extra virgin olive oils. Both cooperatives and producers seem bent on keeping the prices to those levels, hence most of them refuse to sell any lower. On the other hand, Spanish and (especially) Italian bottling companies are avoiding long term purchases, focusing on covering only their short-term customer needs for fear of raising the prices higher.

Contrary to Spain, in Italy, the truly destructive season has driven the average price of olive oil to about 6,00€/Kg. It is to be expected though, since it appears to be the worst season in history for Italian olive oil. Specifically, there are areas in the South that production has dropped below 65% compared to previous year.

In the rest of the olive-producing world, like Greece, Tunisia and Turkey, the decline in production is estimated to 30% – 35% with prices in Greece around 3,10€/Kg for the extra virgin olive oil (which represents this year less than 20% of total olive oil production) and in Tunisia 2,75€/Kg. Similar to Spain and Italy, there appears to be the same hesitation from both the buyers and the sellers side, seemingly waiting for price developments in Spain before they react.

In conclusion, we can admit to the existence of a general stagnation in the markets which we believe will continue for several weeks to come…