Possible decrease in production for the next olive oil season

Numerous extra virgin olive oil cooperatives from Castilla la Mancha have met in a Sectorial Assembly of Olive Oil in mid-June of this year 2017 with the aim of studying the situation of their sector and begin to prepare estimates on olive oil production for the next campaign 207/18.

In the Cortijuelo de San Benito you will be informed of the most important novelties in the sector of olive oil, natural cosmetics and raw honey. Apart from offering you a great selection of these products from different parts of Spain: La Alcarria, Sierra Magina, Sierra de Cazorla, Valencia, Jaén, etc.

Gregorio Gomez, spokesman for the oil cooperatives of Castilla la Mancha said that in a few weeks will begin to appear in the media estimates about the next campaign with figures. We are already ahead of schedule and we estimate that next season we will have a 10% reduction in production in Castilla la Mancha compared to the current season, where 114,000 tonnes of olive oil were produced.

Gregorio also points out that we are at the beginning of summer and this season is very atypical, so we have great uncertainty as to how the weather will behave in the coming months. If this summer is mild, short, rainy or temperatures are not very high, we could find an increase in the harvest, otherwise the outlook could worsen.

In spite of rather negative estimates, all the cooperatives in Castilla la Mancha are facing summer with optimistic expectations because this season is being good in olive oil prices, prices which are at historic highs and exports are also increasing in exports.

Rise in olive oil exports

According to the 2016 Annual Economic Report of the sector, which has been prepared by the Spanish Federation of Food and Beverage Industries (FIAB), olive oil is the second national product exported, with a turnover of about 3,400 million euros.

There is an increase in exports as extra virgin olive oil is more and more associated with health throughout the world. The markets with a population with purchasing power and that values its health, are increasing its consumption.

Photo 1: Extra virgin olive oil from Cortijuelo de San Benito

Our olive oil price estimates

Spring already marked the formation of the fruit of the olives and now, at the beginning of the summer season, the climatology will impose the harvest that we will gather at the end of the year.

These high prices have not been known for decades. In my opinion these high prices are going to stay that way in the following months, months I mean at least in the next 7 or 8 months. But will they go down, will they stay stable or will they go up?

I think prices will remain stable at best, as long as this year’s weather is mild and brings some rain. However, in the case I see most likely, where we have a hot summer, which should cause considerable nervousness in the olive oil market. Therefore, this should lead to slight rises in oil prices until we reach the end of summer and it is more certain what is going to happen. From then on we could have a correction, but return to prices of a few months ago.

Strong increases in olive oil with the prices we have I do not think they will happen. Even if we had an extremely hot summer. In this case, we might see some upside peaks.

With increasing exports and levels of speculation, I would not expect significant falls in the price of olive oil. Even more so when Italy’s production is at historic lows.

Anyway, the summer is starting and we will see what happens with the olive oil prices and the estimates that will soon be emerging.

Sources:

El periódico Agro-Información. Cooperativas CLM prevé un descenso de la producción de aceite de oliva de un 10% respecto a la presente campaña. http://www.agroinformacion.com// 21 de junio del 2017

Revista Olimerca. El aceite de oliva, segundo producto más exportado por España.http://www.olimerca.com/noticiadet/el-aceite-de-oliva-segundo-producto-mas-exportado-por-espana/4a9237413c005e8b56017bf9391791f4 29 de Junio del 2017

El periódico Ideal. Las almazaras deben incidir más en la salud del aceite de oliva para exportar.  http://www.ideal.es/jaen/jaen/201602/13/almazaras-deben-incidir-salud-20160213005543-v.html 13.de febrero del 2016