IndexBox has just published a new report: ‘EU – Olive Oil (Virgin) – Market Analysis, Forecast, Size, Trends and Insights‘. Here is a summary of the report’s key findings.
High prices and growing demand in the olive oil market have spurred investments to expand and mechanize plantations that will automate the production process. This will enable increased production in the EU from a projected 2.2M tonnes in 2021 to 2.3M tonnes by 2025. Thanks to rising demand from Asia, top European exporters – Spain, Italy and Portugal – will be able to boost shipments.
Key Trends and Insights
High prices for olive oil in 2020-2021 have prompted an influx of investments to expand plantation sizes in Spain, Italy and Portugal. Olive oil production is becoming completely mechanized from planting trees to harvesting the product. This facilitates minimizing waste and achieving high quality and that improves profitability. Based on projections from the EU Agricultural Outlook 2021-31, IndexBox calculates that in 2021 EU olive oil production will total 2.2M tonnes, then by 2025 increase to 2.3M tonnes and in the following years, it will steadfastly grow to reach 2.5M tonnes by 2031. In Greece, land allocated for plantations will be reduced, however, the country will retain its status as one of the leading exporters.
Climate change, drought and water scarcity will be the key negative factors hindering production growth. To mitigate that, new olive tree varieties that are more resistant to extreme weather conditions will be introduced for new plantations and to replace current ones.
Consumption per capita of olive oil in EU countries, excluding Italy, Spain, Portugal and Greece, will rise about 4% annually, but remain relatively low (1.3 kg/person by 2025). At the same time, the arithmetic mean of per capita consumption in Italy, Spain, Portugal and Greece will decline from 9.3 kg/person in 2021 to 8.9 kg/person in 2025.
Demand from non-European countries is growing and thus driving a projected increase in the total EU olive oil shipments to outside the union from an estimated 860K tonnes in 2021 to 949K tonnes in 2025. The main gains in exports come from those countries without domestic production. In these cases, the main focus is on shipments of high-quality bottled and organic olive oil.
Portugal and Spain should significantly solidify their leadership positions in global exports thanks to heightened demand in Asia-Pacific as well as potentially increased shipments to Brazil. Spain is the largest olive oil supplier with a market share of 43% of global exports. Growing competition from producers in the southern hemisphere is forecast to not significantly influence the EU’s position on the international market.
Virgin Olive Oil Exports in the EU
Spain represented the major exporting country with an export of about 852K tonnes, which accounted for 56% of total exports. It was distantly followed by Italy (311K tonnes), Portugal (177K tonnes) and Greece (165K tonnes), together creating a 43% share of total supplies.
In value terms, Spain ($2.5B), Italy ($1.4B) and Portugal ($569M) appeared to be the countries with the highest levels of exports in 2020, together comprising 87% of total exports. Greece lagged somewhat behind, accounting for a further 10%.
In 2020, the virgin olive oil export price in the EU amounted to $3,371 per tonne, falling by -6.2% against the previous year. There were significant differences in the average prices amongst the major exporting countries. In 2020, the country with the highest price was Italy ($4,481 per tonne), while Spain ($2,960 per tonne) was amongst the lowest.
Source: IndexBox Platform