Olive oil exports in the European Union (EU) look set to reach a new record in the 2019/20 crop year, Olive Oil Times reported on 6 October from a new report.
The Agriculture and Rural Development’s short-term market outlook report for autumn 2020 said that from October 2019 to July 2020, exports had grown significantly and were forecast to reach 820,000 tonnes.
According to data from the International Olive Council, the previous record had been set in the 2018/19 crop year when the bloc exported 647,000 tonnes.
“These increasing flows (of imports) are driven by both EU processing and re-exporting needs, which helps to sustain business relations in certain export destinations where some EU exports are restricted due to retaliation tariffs,” the authors of the report said.
The increase in imports had mainly been due to ‘strong consumption by households’, which the report attributed to lockdowns imposed by most of Europe to curb the spread of COVID-19 despite reduced demand from the restaurant and hospitality sectors.
“Together with an anticipated export growth, it should contribute to a stock reduction of 20%,” the report said.
Looking ahead to the 2020/21 crop year, the report forecast that olive oil production in the EU would reach 2.2M tonnes, a 17% increase compared with the previous year.
The report expected Spain to produce 1.55M tonnes, with production in Italy and Greece estimated at 290,000 and 280,000 tonnes respectively. Production in Portugal was forecast to reach 100,000 tonnes.
Due to the record high exports of the current crop year and existing stocks in many of the world’s largest olive oil consuming nations, exports were predicted to dip again in 2020/21.
The report forecast that the EU would ship 790,000 tonnes abroad, resulting in a decrease in imports.
However, olive oil consumption was expected to continue increasing.
A 3.5% rise in consumption was forecast in 2020/21, due to the continued growth of domestic demand along with the slow recovery of the restaurant and hospitality sectors.
Export volumes increased to all the EU’s main olive oil destinations, including a 32% increase in shipments to both Brazil and the UK (which formally left the EU on 31 January, 2020). There was a 16% rise in exports to the USA and 3% increases to both Japan and China.
However, the value of these exports had not matched the volume due to persistently low olive oil prices throughout the EU, the report said.
The value of olive oil exports to the USA fell by about 3% and dropped by 10% to both Japan and China in 2019/20.
Olive oil imports could also reach a record level, with the EU expected to bring in 240,000 tonnes in the 2019/20 crop year. Almost 90% of these imports were expected to come from Tunisia, which was expecting to achieve record exports in 2019/20.
While both exports and imports were expected to increase as the crop year came to a close, olive oil consumption was expected to increase by 3% in the EU.