EXTRA VIRGIN OLIVE OIL… WHAT’S NEXT?!

In modern times, more and more attention has been paid to the importance of a balanced diet and experts from all over the world continue to highlight how the Mediterranean diet is the best ally in order to follow a healthy lifestyle.

The Mediterranean diet, we remind, lays its foundations on natural products, usually combined together without ever using transformation processes that could alter their nutritional properties.

One of the cornerstones of this diet is extra virgin olive oil. An example of a product with a thousand-year history, which provides noble nutrients and enriches any dish.

Using extra virgin olive oil on a daily base has always been a consolidated habit, especially in producing countries such as Italy, Spain, Greece, the Middle East and North Africa.

In-depth knowledge of the qualities of this product has made it famous throughout the world, so much so that it has become the primary choice for condiments and bases for more complex dishes, from foodies to awarded chefs.

The demand for this product has therefore seen exponential growth in recent years, driven by reasons linked to both its healthy and organoleptic properties.

A request that now has a global reach and sees many importers engaged in the distribution of fine oils even in very distant markets, driven by demanding consumers with strong purchasing power. The growing demand, however, has been countered by a sharply declining supply, due to increasingly extreme climatic events, problems linked to invasions of non-native insects and other variables such as the management of the production chain.

All this has created a scenario where many companies have fallen into unethical practices, such as altering the origin of oils.

In fact, if it is true that consumers see superior quality and a guarantee of origin in the oils produced in Italy, Greece and Spain, on the other hand we have data that tell us about a national production incapable of satisfying both internal demand and exports . This ends up having to import oils from other countries or compromising quality by proposing blends with refined or downgraded oils.

The question we ask ourselves then is: is Extra Virgin Olive Oil destined to become a niche product due to scarcity?

The answer we hope is "no" but unfortunately the history of other products such as Quinoa should make us reflect. In fact, Quinoa, from being a staple of the Bolivian and Peruvian diet, has become an important food worldwide thanks to its nutritional characteristics.

Unfortunately, the greater value attributed to this product in export markets has pushed companies to give greater weight to exports, rather than local consumption, due to the greater profitability.

Thus, the local population has seen not only a drastic decline in the availability of Quinoa but also a significant increase in prices, further worsening the social and economic situation.

It is therefore normal to stop and wonder if this could also happen to other "fine" foods such as extra virgin olive oil.

What should we expect from the evolution of the next few years and what policies can be implemented so that EVOO continues to be available at affordable prices, as it should be when talking about a healthy food for the consumer?

We don't have an answer because everything will depend on the combination of several key facts, including:

Climatic: which can have devastating effects on the productivity of olive trees;

Commercial: linked to ethical practices that allow the consumer to have reliable and updated information on the products and their origin;

Political: through laws and actions that protect producers, especially virtuous ones who also support sustainable and organic cultivation.

To date we know that at the end of July the stocks of Spanish olive oil in the mills amounted to approximately 150 thousand tons. So three months of battery life, maybe a little more.

With production flows starting at the end of November, operators expect prices above 10 euros/kg, effectively making the shelf price prohibitive for many consumers.

As of today, the mid of October, we expect a difficult campaign and a future full of uncertainty.

The analysis of the extra virgin olive oil market recently presented in Brussels by the Civil Dialogue Group, a panel of experts from the Agriculture Directorate at the European Commission, confirmed the negative picture also highlighted by Assitol:

“The data from the Civil Dialogue Group certifies the cry of alarm that we have raised several times during this complicated olive oil campaign – comments Andrea Carrassi, General Manager of the association –. Some critical issues will still be present and will impact the entire supply chain, which will be called upon to challenge a difficult scenario.

Analyzing some numbers and according to the findings of Brussels experts, the entire world production in the 2022-23 campaign recorded a drop of 26% compared to the previous one, for a total amount of 2,500,000 tonnes of olive oil.

In particular, European production has lost almost 40% of its quantities, confirming the trend of the last five years characterized by the constant reduction of olive oil in the European Union (-35%).

Spain, which produces almost half of the world's olive oil volumes, produced 664,000 tonnes - 56% less than its usual standard.

For Italy, with 241,000 tonnes, the decline in the just concluded campaign stands at -27%.

Outside the EU, we note the growth in production in Turkey (+17%) and the sharp contraction in volumes in Tunisia (-25%) which also saw its exports reduce.

Another worrying indication concerns the end-of-season stock of 280,000 tonnes: a very low figure compared to the 2021-2022 campaign, which ended with 670,000 tonnes.

The limited availability of olive oil has been causing prices to rise throughout Europe for several weeks, causing a further decrease in consumption already burdened by inflation. This aspect also weighed on exports to non-EU countries which purchase mainly in Europe, such as the United States (-20%), China (-31%), Canada (-18%), and the United Kingdom (-17, 3%).

“It would be a serious mistake to believe that the next campaign will fix everything – warns Carrassi -. On the contrary, the reduced stocks of olive oil in Europe make us fear for the availability of extra virgin olive oil in the coming months and, in general, for the next campaign". The drought, which had such an impact on market performance, is still having its effects felt throughout the Mediterranean together with the consequences of extreme weather events.

Therefore, although there are positive expectations for a better Italian campaign than the past one, there is the risk of seeing the same situation repeat itself, making the prospects of the sector even more difficult, now correlated to the trends of the nearby markets Spain and Greece.

There is an urgent need for serious reflection, within the supply chain and with the institutions, on the measures that allow not only to guarantee extra virgin olive oil to consumers, but also a reasonable purchase price.

Never before has there been a need for close collaboration between technologists, universities, politics and supply chain operators, including final producers and distributors, more than in this period.

Probably, this will not be enough to completely stem the problem but it will certainly help to identify corrective, preventive and final measures, which will at least be able to limit the negative effects during the more complex seasons, effectively guaranteeing the presence of oil on shelves for everyone and with an affordable price.