In Greece, the harvest was frozen due to exceptional rainfall (>100 mm), which, however, was more beneficial to the health of the plant capital than to the oil content of the remaining half of the crop still on the trees. Along with the harvest, the market also froze, although the few commercial offers improved by 10 to 30 cents on average compared to last week, mainly helping the lower end of the range, despite new highs above €6 for the best conventional extras. Realistically, the gap between producers' and buyers' demands is estimated at €1 to €1.5.
As far as the Spanish market is concerned, it is widely accepted that in the immediate future we will see the low season in a completely reverse scenario to the 2023-2024 season. This year, stocks reached their limit by the end of October, while in every way (and this is worth emphasizing) the industry refused to commit to bulk purchases, resorting to opportunistic supplies, buying little by little in November fresh olive oil from producers who cultivate intensively, at prices that allow it to sell olive oil on retail shelves today at €7 and €8 per liter, or even lower in the run-up to Christmas. On December 11, the Spanish balance sheet for November is eagerly awaited, which will shed light on fresh stocks and consumption. Spain, the industry leader, again based on official data, expects a 17% increase in domestic consumption and 32% growth in tonnage in 2024/2025.
Beyond that, after the first 10 days of mass harvesting, initial yield figures are modest, with oil content averaging 16-17% compared to 19% estimated by the Spanish Ministry of Agriculture to meet the 1.3 million ton scenario, and in practice it is not excluded that the final yield may be less than 1.2 million tons. Of course, at the global level, even with European production at the 2 million ton limit, the supposed extra-parliamentary production of 650,000-700,000 tons is muddying the waters in the market, bringing the global harvest closer to 3.1 million tons.
Macroeconomically, production is linearly and positively linked to consumption, something that those with portfolios and responsibilities recognize. The net decline in consumption over the last two years barely reached 12.5%, despite historically high prices, while production over the last two years fell by 25%. In short, consumers are constantly demonstrating that they are willing and able to pay more for olive oil than in previous years in order to satisfy all links in the value chain., The question is who will reap the benefits of this payment intention.
The dual role of the tax year for olive oil
Linking the harvest to the corresponding tax year, with the possibility of amending the declaration without penalty, has been requested for several years by olive oil producers, with the issue of tax rates coming to the fore again after last season's high prices. Farmers who sold at high prices in December 2023 are now essentially obliged to sell by the end of the year at whatever price they can find in order to show income in 2024. «We don't want to sell at €5 or €5.50; we don't have the production costs and, above all, the cost of living of the Spanish or Tunisians. People now know that the market can pay €6-6.5 to farmers for good olive oil,’ explains a producer from Chania.
