The global olive oil market is currently suspended, characterized by high uncertainty, low bulk transaction volumes, and a nervous wait for the new harvest. Market activity is difficult to predict, as low bulk oil availability coincides with low overall buyer demand.
No official pricing is quoted this week for all categories, as the sector awaits the decisive start of the 2025/2026 season.
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The drought's impact on olive groves
The olive oil market continues to grapple with climatic uncertainty as it approaches the critical harvest season. In key production areas, like the Sierra Sur of Jaén, current drought conditions are severely impacting outcomes.
Rafael Cano, owner of 30 hectares of olive groves in the region, describes the situation as critical. While the harvest typically begins in mid-November, the determining factor right now is the water shortage.
"This crop is intimately linked to the rain. Since the beginning of April, not a single drop has fallen. Imagine the trees going so many months without rain," says Cano.
Despite having installed irrigation systems, the lack of rain has turned maintaining the olive groves into an expensive and exhausting task, consuming both time and resources. Well water is insufficient, and operating costs are skyrocketing.
"We don't have enough water to meet the olive groves' needs. We also incur huge expenses on irrigation; we're a bit fed up already," Cano admits.
Cano details the layered difficulties and expenses: "The pipes break, and you have to change the well piping. Or a well dries up, and you have to deepen it. Daily, there are ruptures in the irrigation hoses due to wild fauna, including wild boars, rabbits, and moles. Every day you have to be watching the irrigation and the little water you have left in the wells."
Given the persistent lack of rain, Cano's production forecast is bleak: "If it had rained in September or early October, then we would have production similar to last year. But I think it will be lower than last year's; right now I'd say 20 percent lower, but of course, everything depends on the weather."
This uncertainty directly translates to the market. Rain not only saves the harvest but also relieves the pressure on prices. "If it rains soon, then prices will fall," Cano states. Conversely, the absence of water will ensure high market pressure: "If it doesn't rain, if it goes all of October without a considerable amount of rain, then prices are going to be under high pressure."
Regional market reports
Spain: Awaiting rain and delayed harvest
Spain's olive oil market outlook remains highly sensitive to weather conditions. While recent rainfall in some regions is expected to help slow down price pressure, it is not yet sufficient to fully resolve long-term supply concerns. Analysts note that the harvest is projected to start with a three- to four-week delay compared to a typical year. This delay means the production trend for the next crop is difficult to predict, with the general trend unlikely to stabilize until January. Consequently, this uncertainty is keeping immediate bulk transaction rates low.
Greece: Suppliers willing to sell
In a notable shift, some Greek suppliers are now indicating a willingness to sell their existing stocks. This movement is particularly evident among those holding oils considered of borderline quality, suggesting producers are prioritizing the clearing of current inventory ahead of the delayed new harvest.
In Crete this week, Extra Virgin olive oil in mills is selling at €4.25-4.70/kg, Virgin olive oil at €3.45-3.95/kg, and Lampante at 2.85-3.30/kg.
Italy: Speculative pressure
In the Italian market, reports have emerged of speculators attempting to offload stock previously purchased at lower average prices. This activity is resulting in localized pressure to sell at a price below current production costs.
Global trends
While current prices for olive oil remain high, some suppliers may be willing to offer decreased prices by mid to late November for forward delivery contracts. Stakeholders are focused on negotiating these November delivery prices to capitalize on the anticipated market correction driven by the incoming crop.
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