This season's olive oil production is expected to total 1.5 million tons.Photographer: Angel Garcia/Bloomberg

October 2023:  According to recent forecasts from the European Commission, European households should brace for another year of soaring olive oil prices. Despite hopes for relief, the surge shows no signs of slowing as climatic pressures and limited reserves continue to strain supply across key producing regions.

The new season, which began this month, is projected to bring a total output of around 1.5 million tons. That figure represents just a 9% increase compared to last year—far from enough to restore balance in the market. Ongoing drought conditions have once again weighed heavily on growers, leaving orchards in regions like Jaén, Spain, with reduced yields. With stocks already low, prices in these major hubs have escalated dramatically, nearly tripling the five-year average.

These record highs have filtered down into everyday life, keeping the cost of Mediterranean staples such as pizza and paella uncomfortably high, even as inflation begins to cool in other sectors. Consumers across the European Union are expected to cut back, with the Commission predicting a 6% drop in olive oil consumption during the 2023–24 season. Exports are also forecast to decline by about 10% compared to the previous year.

The rally has already pushed olive oil to unprecedented price levels this year, and according to Brussels, the market’s upward momentum will likely persist for another 12 months. For growers and industry stakeholders, the news underscores how tightly climate extremes and limited inventories are reshaping supply and demand in one of Europe’s most cherished food sectors.

Reference

Bloomberg report on EU olive oil outlook