The olive harvest season has started throughout Spain. At Señorios de Relleu along the coast near Alicante, they have been picking for a while, and this week the harvest also started in inland Spain.
This was a good moment to check in with my suppliers, the Spanish media, and informally through my family to understand the expectations for the upcoming harvest. Having spent more time in Spain myself, I noticed that it had rained. After two poor harvest years in the olive oil sector in Spain, Spain is on the verge of a promising harvest. This is good news for the entire supply chain, from farmers to olive oil-loving consumers.
Outlook for the Spanish olive harvest
According to market experts, Spain is expected to produce between 1.4 and 1.45 million tonnes of olive oil. This is a small adjustment from its earlier estimate of 1.65 million tonnes, but still a significant improvement over recent years.
The winter season has played an important role in these positive prospects. Thanks to a wet winter and mild spring, conditions have been favourable for the flowering of olive trees. Water reserves in Spain have recovered significantly, which has particularly benefited non-irrigated orchards. In the Sierra de Segura region, olive groves are not irrigated.
Recovery of olive oil production in Andalusia
Andalusia, the largest producer of extra virgin olive oil in Spain, expects a harvest of approximately 1.1 million tonnes of olive oil. This is a huge improvement compared to last year, especially in the provinces of Jaén and Córdoba, where growth is expected, yielding 445,000 and 271,000 tonnes of olive oil respectively, representing an increase of 116% and 79% compared to the 2023/2024 harvest year.
The increase in production is attributed to a quiet period for the trees, better rainfall, and less extreme weather conditions during important phases such as flowering.
Nevertheless, predictions remain cautious, as extreme weather conditions at the end of summer, such as hailstorms and heatwaves, have somewhat curbed production. Another factor in the recovery is that current stocks of extra virgin olive oil are becoming reasonably depleted, and these stocks must first be replenished.
I have also experienced myself that yields can vary by region. While the outlook is positive inland, it has remained very dry on the Costa Blanca near Alicante and with our supplier Señorios de Relleu. They fear a harvest similar to last year's, which was not very good. During my visit, I saw many empty olive trees where no fruits had grown.
Impact on extra virgin olive oil prices
Although olive oil prices have fallen this year from their record highs earlier in 2024, they remain significantly higher than usual. The price of extra virgin olive oil in Spain is currently around €6.73 per kilogram, which is 25% lower than the peak in January 2024.
Farmers and producers hope that prices will stabilise, so that consumers who switched to lower-quality olive oil or sunflower oil due to high prices will return to extra virgin olive oil.
Source: ycharts.com (updated: November 15, 2024)
My expectation is therefore that prices will only really fall at the end of autumn 2024, and I hope that in the first quarter, the prices of extra virgin olive oil in the Netherlands will fall back to more favourable levels.
Outlook for the future
Although this year's harvest will remain below historical peaks, it offers much-needed relief to the sector after several difficult years. With better availability of oil and a more favourable price trend, both producers and consumers will benefit from these developments.
All in all, the future looks brighter for the Spanish olive oil sector, which, after years of drought and low yields, is finally on the verge of recovery.
Update November 15:
After the first month of the new olive harvest, yields in the Mediterranean countries are disappointing. Both in Italy and Greece, the initial harvest yields have been extremely disappointing. According to the Olive Oil Times, in Greece, olives are even being left on the trees longer to grow, so that the olive oil yield will be higher.
It will also not have escaped anyone's attention that Spain has been severely affected by heavy rainfall and floods in the past month. Olive groves in Valencia have been significantly damaged as a result. However, these are small olive groves compared to the inland in Andalusia, where about 60% of all olive oil comes from. The expectations from the largest regions are still positive.
The favourable reports from Spain are important for the European market, as Spain is the largest olive oil-producing country in Europe and will therefore be a major determinant of olive oil prices.
Sources:
- Olive Oil Times: https://www.oliveoiltimes.com/production/filippo-berio-exec-forecasts-production-rebound-falling-prices/134464
- Olive Oil Times: https://www.oliveoiltimes.com/production/officials-in-spain-optimistic-ahead-of-harvest-as-prices-remain-elevated/134609
- Juan Vilar
- Olive Oil Times: https://www.oliveoiltimes.com/production/harvest-in-greece-runs-into-early-problems/135031
- Olive Oil Times: https://www.oliveoiltimes.com/production/italian-growers-face-disappointing-yields/135271
- Agridata Directorate-General for Agriculture and Rural Development
