An aerial view of agricultural employees washing grapes, with a mix of water, olive oil and potassium carbonate referred to as “posata” to make them look brighter and defend them from the burning rays of the solar in Menemen Plain of Izmir, Turkiye, on Aug. 27, 2024.
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The chief govt of Spain’s Deoleo, the world’s largest olive oil producer, says a bumper harvest and enhancing market sentiment present that the trade is recovering from one of its toughest moments ever.
A considerable olive harvest, notably in Spain, has helped to revive confidence within the sector and led to a pronounced fall in costs for each further virgin and virgin olive oils in supermarkets.
It comes after two consecutive seasons of poor yields resulted in a interval of extraordinary turbulence all through the olive oil worth chain.
An ideal storm of climate change-fueled excessive climate, excessive rates of interest and strong inflation culminated in a dizzying price rally of the liquid fats final yr — one which surprised shoppers and trade veterans alike.
Deoleo CEO Cristóbal Valdés stated “a significant shift” has since been underway, nevertheless.
“What was as soon as one of the vital difficult intervals in our historical past — marked by a shortage of uncooked supplies, excessive value volatility, and declining consumption — is now giving technique to a extra normalized and promising market panorama,” Valdés advised CNBC by electronic mail.
Deoleo, the maker of family olive oil manufacturers reminiscent of Bertolli and Carbonell, stated it expects an surroundings of extra contained uncooked materials costs to persist all through the second half of 2025.
“The numerous rebound within the olive oil harvest — notably in Spain — is already translating into extra steady provide situations, and that is having a direct influence on costs at origin,” Valdés stated.
“Whereas some volatility could persist, we consider the pattern in the direction of normalization will maintain,” he added.
‘Cautiously optimistic’
Many of the world’s provide of olive oil comes from the Mediterranean, with southern European international locations reminiscent of Spain, Italy and Greece among the many world’s main producers of the commodity.
Spain, specifically, is the largest olive oil producer within the European Union and a worldwide reference for costs.
Spain’s Ministry of Agriculture, Fisheries and Meals said the nation produced 1.41 million metric tons of olive oil within the 2024/2025 crop yr. The yield, which was barely lower than forecast, marked a roughly 65% improve from 855,600 metric tons a yr earlier.
An individual holds a bottle of olive oil on June 21, 2024, in Barcelona, Catalonia, Spain.
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Deoleo’s CEO stated the bumper Spanish harvest prompted a 50% drop in uncooked materials costs, stimulated demand and allowed the corporate to decrease olive oil costs on the shelf.
“Our outlook is due to this fact cautiously optimistic: we anticipate a extra balanced market, the place accountable pricing and a deal with worth will probably be key to sustaining progress and making certain long-term class well being,” Valdés stated.
Deoleo’s CEO additionally stated the extra favorable market situations had allowed the corporate to double its funding in promoting and promotion to 10 million euros ($11.63 million).
Chatting with CNBC earlier than the U.S. and EU agreed to a tariff fee of 15% for many EU items from Aug. 1, Valdés said the corporate meant to ramp up its communication, advertising and marketing and shopper engagement efforts to make sure olive oil stays an on a regular basis staple.