January 2019 - E.V.O.O. market report: Do you get what you pay for?

Happy new year to everybody. We would like to thank you and hope you will find our reports useful throughout this year as well. Let us see how matters are developing in the beginning of 2019.

In Spain, the harvesting still hasn’t concluded. The country’s production is estimated to approximately 1.550.000 tons. Both the quantity and quality of it is expected to be fairly good, according to the producers. What is not good, is the price of the extra virgin olive oil that has remained steadily below 3€/Kg spot. Furthermore, many agricultural cooperatives and producers, Andalusian UPA included, threaten to halt the harvesting if prices do not increase above that spot.

On the other hand, in Greece, harvesting has almost finished, with few olive oil presses still operating and with the producers in despair. Production until now doesn’t exceed 180.000 tons with premium extra virgin olive oil quantities (something that Greece is known for) expected to be lower than ever.

In Italy, all olive oil production factories have closed for 2018-2019 (or more precisely, all factories that opened have closed). Admittedly, this is going to be one of the worst harvest periods that the Italian olive oil has ever seen. Total production is estimated to 190.000 tons and surely Italian standardizers will need to import large quantities to cover their customer’s demand. The problem is, this time, they will not have at their disposal the large reserves of Tunisian production, like the previous year. Tunisia is expected to produce about 160.000 tons of olive oil, a significant decline from previous year’s 280.000 tons.

Greece, that is also a very good source of high quality olive oil for Italy, has their own problems as we mentioned above. Olive oils with premium characteristics (low acidity, rich in polyphenols) are scarce and most of them will be kept to cover the demand of customers in the Greek market.

In conclusion, the fate of this year’s olive period rests in Spain’s hands. If Spanish producers and cooperatives withhold their production, then prices are expected to increase slightly, to the price range of 3,00€ – 3,10€ /Kg for the extra virgin olive oil. If however, they decide to start selling to the Italian standardizers, it is possible that prices will drop even lower than the current levels.

We estimate that prices regarding the period of January will remain stable, waiting for Spain’s harvesting to conclude. As we mentioned in our previous report, there are still large reserves from the previous year’s period, which helps keep price fluctuations minimal. Although prices remain stable for the time being, quality is a different story, hence we advise you caution when choosing which olive oil to buy since this year is going to be a challenging one quality wise.