The new olive oil season is expected to bring solid production across the Mediterranean, but not a bumper crop, with supply forecast to be sufficient to meet demand and keep market prices under control.
Early estimates put Mediterranean production at between 3 million and 3.2 million tons for the upcoming season, which will begin to take shape from October and particularly November.
Manolis Giannoulis, president of Greece’s National Interprofessional Olive Oil Organization, said the projected volume should be more than enough given current consumption levels. Per-capita olive oil consumption has reached 9.7 kilograms.
While consumers could benefit from more affordable prices, producers face a much more difficult situation as their costs remain high.
Olive oil prices put pressure on producers
Producer prices are currently around €4 to €4.50 per kilogram, a level considered too low to cover the costs of cultivation.
Giannoulis said market expectations indicate that prices could start the new season at around €4 per kilogram, with the possibility of further declines.
The expected balance between supply and demand could add to that pressure. For consumers, lower prices may be welcome, but for farmers, current returns are increasingly difficult to reconcile with the cost of producing olive oil.
Giannoulis described the situation as having two sides: consumers want a more affordable product, while producers are struggling to make olive cultivation financially sustainable at current prices.
Rising costs threaten olive cultivation
The challenge for producers extends beyond the selling price. Harvesting, labor, fertilizers and other agricultural expenses have all placed a heavier financial burden on farmers.
If prices remain below the level needed to cover those expenses, some producers could eventually abandon olive cultivation.
“When the producer pays to harvest the fruit and sell the product, when the money is not enough to cover cultivation expenses and labor, there is a phenomenon of abandonment,” Giannoulis said.
Weather provides some relief
Weather conditions have so far offered some support to this year’s crop.
Although temperatures have been high, they are not considered inherently damaging to olive trees. The rainy period that preceded the current conditions has also helped improve water availability, while groundwater reserves have been replenished to a significant extent.
The overall condition of the crops therefore does not currently point to extreme weather-related problems.
Olive oil stocks remain sufficient
Existing supplies are also providing some reassurance to the market. Available stocks are considered adequate, with quantities viewed as more than sufficient to meet demand during the next two months, before the new olive oil season gets underway.
Giannoulis said the coming season is expected to be normal overall, but stressed that producers remain the main point of concern because of the costs they are struggling to absorb.
“We expect a normal year ahead in every respect,” he said. “If there is a problem, it will be for the producer, who is facing costs that are difficult to cover.”
