If you love olive oil, now might be the time to stock up. Production across the globe is dropping due to a number of issues, while global demand is ticking up.
In a recent piece for Forbes, American entrepreneur David Schrieberg notes that global olive oil prices jumped 25% in 2017 and 26% across Europe the past two years, according to the International Olive Council. Meanwhile global output is down 14%. Global demand is on the rise despite tighter supplies, with Australia, Brazil, China, Canada, Japan and the U.S. seeking more of the product. Mr. Schrieberg spoke with Sebastian Hendricks, a consultant at IRI, about the trend:
"'It’s interesting that olive oil, which has traditionally been dominated by recognizable brands, has seen a significant shift in recent years. Private label is now better in quality, which is why we have seen (their) increase in other categories as well, but we are also seeing retailers, including the discounters, giving much more shelf space and extending the range of their oils, including organic ranges, in-store."
However, it may not all be bad news. The California Olive Committee is optimistic the state's table-olive crop will be large in 2017 in advance of official estimates, according to the California Farm Bureau Federation. The committee expects 27,000 acres to be dedicated to table-olives. The California Olive Oil Council expects olives grown for oil to cover about 38,000 acres. (Editor's note: this webpage will be replaced by the Federation's next update, expected June 7.)
USDA's Foreign Agricultural Service also noted in a May 10 report that olive oil production is forecast to make a significant recovery from the current marketing year. From the report:
"Global olive oil production in 2017/18 is forecast to recover to 3.1 million tons. Production prospects in the EU are expected to improve, based on anticipated yield recovery in Spain as well as a rebound in the Portuguese crop (following a poor fruit bearing year). In addition, planted area in Spain and Portugal continues to expand. In Italy and Greece, production is anticipated to return to average levels in 2017/18 after a poor 2016/17 harvest. Supplies in the EU are forecast to be sufficient to meet domestic needs and allow for a steady export pace. Olive oil production in Tunisia is forecast to recover in 2017/18 following improved weather conditions last winter leading to good vegetative growth. Due to a projected recovery in global olive oil production in 2017/18, stocks are forecast to recover as well but remain below historic norms."
However, despite some optimism, Schrieberg notes prices are still up globally. He notes that prices were 28% higher in Spain, 70% in Italy, 24% in Greece and 28% in Tunisia through April 2017. “Over the next coming months the prices in the supermarkets in the U.S. and U.K. will be higher than two-to-three months before,” Panayotis Karantonis, director of the Athens-based Greek Association of Olive Oil Processors and Packers, told the Financial Times.
So, maybe some good news is on the horizon, but it might be best to stock up today.