The EC expects the production of olive oil to fall in Spain next season and increase in Italy, Greece and Portugal
The European Commission (EC) foresees that the climatic conditions support the recovery of production in Italy and Greece and sustain the growing trend of Portugal in the 2019/20 campaign; while in Spain, the absence of water and the natural interannual alternation of olive trees could lead to a level of production below the average of the last five years.
In a report on agricultural perspectives, the Community Executive notes that in the months of April and May the rains favored the flowering of the olive groves in Italy and Greece. In Spain, on the other hand, the water reserves were recovered thanks to some rainfall registered in April, although a very hot and dry spring stopped this development.
The Commission forecasts that the European production of olive oil for the 2019/20 campaign could be around 2.1 million tons (-8% year-on-year, but 4% more than the average of the last five years).
According to Brussels, the increase in stocks at the end of the current season could help meet domestic and export demand in the next season.
EU exports continue to grow in 2018/19
Also, this report notes that the increase in the Community production of olive oil in 2018/19 (+4% compared to the previous season) has had an impact on the prices, since in April, the average price in the EU of virgin olive oil was the lowest recorded since October 2014 (265 euros/100 kg.), 14% below the same month last year.
In their opinion, availability and lower prices are driving trades. Thus, EU exports to the United States (the largest non-EU market) grew by 23% in the period between October and April, which contributed to almost half of the growth of European exports. In addition, the EU significantly influenced the growth of total imports of the North American country.
In addition, in that period shipments to Asian markets also increased (Japan, +38%, and China, +30%) which, together with the increase in sales to Brazil (+4%), are markets that are expected to sustain the exports from the EU, estimated to reach 650,000 t. in the current campaign, 15% more than the previous campaign.
Lower prices should also contribute to an increase in EU domestic consumption (+1%, up to 1,590,000 t.), according to the Commission.