Olive Oil Prices Set to Drop as Southern Europe Enjoys Bountiful Harvest

In a welcome relief for consumers, particularly expats and locals in Spain, olive oil prices are expected to drop significantly following a much-improved olive harvest in Southern Europe. After a series of challenging years marked by droughts and extreme weather events, the 2024-2025 harvest season is shaping up to be one of the best in recent memory.

Spain Leads the Recovery

Spain, the world's largest producer of olive oil, is at the forefront of this recovery. According to forecasts by the Spanish Ministry of Agriculture, the country is expected to harvest almost 1.3 million tons of olives this year, a staggering 48% increase from the previous year's disappointing harvest. This surge in production is largely attributed to favorable weather conditions, including recent rainfall, which has boosted the health and yield of olive groves across the country, particularly in the key production region of Andalusia.

Greece and Other Producers Follow Suit

Greece, another significant olive oil producer, is also anticipating a substantial increase in production. Authorities in Greece expect olive oil production to rise from 150,000 to 230,000 tons, further contributing to the global supply and helping to stabilize prices.

Italy Faces Continued Challenges

While Spain and Greece are optimistic about their harvests, Italy continues to face difficulties. Olive oil production in Italy is likely to be even lower than last year, exacerbating the ongoing crisis in the Italian olive oil sector.

Price Drops Already Evident

The positive impact of these improved harvests is already being felt in European supermarkets. In Germany, for example, the discounter ALDI has lowered the price of its own-brand olive oil from €8.99 to €6.79 and organic olive oil from €9.99 to €6.95. Similar price reductions have been observed in other major German supermarkets, reflecting the broader trend of decreasing olive oil prices across Europe.

Projections for Future Prices

Deoleo, a leading olive oil producer based in Spain, projects that olive oil prices could drop to around 5 euros per liter, a significant decline from the highs of 9 to 10 euros that have been common in Spanish supermarkets this year. This price drop is expected to continue into 2025, assuming stable weather and harvest conditions.

Consumer Impact

The anticipated price drop is a boon for consumers who have been grappling with high olive oil prices over the past few years. Many consumers had either reduced their use of olive oil or stopped purchasing it altogether due to the elevated costs. However, with prices expected to decrease, overall consumption in the EU could rebound by as much as 7% if the reductions are passed on to consumers.

Market Stability and Future Outlook

While there is optimism about the upcoming months, industry experts caution that the market is still subject to various uncertainties, including climate change and its unpredictable impact on future harvests. Miguel Ángel Guzmán, Deoleo's chief sales officer, noted that while there are signs of improvement, it would be premature to declare the crisis over, especially for higher-quality varieties like Extra Virgin olive oil.

As the new harvest season unfolds, the focus will be on maintaining stable production levels and ensuring that the benefits of the improved harvest are reflected in consumer prices. For expats in Spain, this means looking forward to more affordable and abundant olive oil, a staple in the Mediterranean diet.