With the new olive oil harvest approaching this winter, prices may go down but don’t expect too much of a decrease. In fact, with current global olive oil levels (including next year's predicted harvest and any supply left over from last year) prices may stay about the same as last year.
At the International Olive Council meeting in September 2015, members discussed the final tallies from the last harvest and looked forward to their expectations for the next harvest.
Projections for 2015/16 are still unsteady and appear to be offered as an estimate but without too much conviction. They expect that production will be looking up from last year, but will not be as good as the year prior. This is, the IOC reminds us, as long as weather conditions don’t change too much between now and the key part of the harvest (December 2015).
This graph is a great representation of the fluctuations in the market over the last 10 years. The key part of this visual is the fluctuations from year to year. It show the ups and downs of the commodity market over the last 10 years. As you can see, 10 years ago and again 5 years ago, prices significantly dropped. In the last year, they have been at record highs
A Review Of Last Year’s Harvest
Final numbers have been tallied surrounding last years olive oil harvest. Total world olive oil production was 2,390,500 tons. This is 27% less oil than was produced the year prior. Spain’s production was down 53%, which is a major reason prices were driven so high, given that Spain is the “price driver” for the olive oil market.
Here’s a review of all of the different countries and how their production levels changed from the year before. They are ranked in the order of who produced the most oil.
- Spain: -53%
- Greece: +127%
- Italy: -52%
- Portugal: -33%
- Tunisia: +321%
- Turkey: +19%
- Morocco: -7%
- Syria: -42%
- Algeria: +58%
An interesting note concerning Tunisia: when Spain and Italy have produced very low volumes, they often import olive oil from other, better producing countries to help fill their deficit. Tunisia is the primary exporter to them right now.
This past harvest year, Spain’s imports from Tunisia increased by 1192% (1192%!!!!), and Italy’s imports from Tunisia increased 336% compared to the year before.
Looking Forward To Next Year’s Harvest
This next harvest (beginning late October 2015 and running until February 2016) is expected to be 22% higher than the last year. The IOC is wary to confirm these estimates, saying that it’s still too soon to know if they will be accurate or not.
The hope is that Spain’s production could be up as high as 38% over last year (bringing it slightly below the level that it was the year before), which could help drop prices across the globe.
However, Tunisia's production will be significantly lower than last year. In addition, the global "supply reserve" (pretty much, what's left over from last year's harvest) is very low. This may counteract any lower prices that Spain could have brought.
Experts predict that overall, prices are likely to stay about the same as last year, or they may see a slight decrease (a few cents per pound).
When Is The Best Time To Contract 2016 Olive Oil Volumes?
The best time to contract your olive oil volumes for 2016 is mid-December 2015. This is when the commodity market is at it’s lowest over the course of the year. The harvest is well under way, accurate production volumes are known and olive oil is plentiful.
Topics: Harvest/Commodity Market