Shoppers might have to splash out more for Italian extra virgin olive oil (EVOO) this year, with prices expected to hold firm across the wider market despite a bumper crop from Spain.
Spain, which benefited from rain and cooler-than-usual temperatures this spring, is expected to produce 1.6 million tonnes in 2018/19, up from 1.25 million tonnes last year.
However, Italy and Greece are both expected to have smaller crops this year - with production set to drop by 58% and 42% respectively. “In Italy, farmers are expecting the 2018/19 crop will be smaller than 2017/18 as olive trees have a biannual on-off production cycle, where a large harvest is usually followed by a smaller harvest in the following season,” says Avneet Deol, an analyst with Mintec. “Farmers are also factoring in the adverse effect to the crop from winter frosts.”
Italy is expected to produce just 180,000 tonnes, down from 428,900 last year. “As a consequence, spot prices for EVOO stocks in Italy have risen dramatically and I think we are destined to see the same peaks as in 2016/17,” warns Filippo Berio UK MD Walter Zanre,
It means European EVOO is trading at €3,000/tonne, while Italian EVOO is at €5,000 already and expected to rise to €6,000/tonne, says Zanre.
Tuscan EVOO will be particularly pricey, he warns, after last month’s fires in Pisa destroyed olive groves. “Tuscan EVOO is going to be really expensive because there will be a shortfall,” Zanre adds.
Smaller crops from Italy, Greece and Tunisia mean global production is set to dip by around 10% from 3.31 million tonnes to 2.98 million tonnes despite a big Spanish crop.
“There is a carryover of stock so there is no risk of a shortage. However, we don’t see prices falling this year because supply and demand will be in balance,” says Zanre.
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