After 2016’s high olive oil prices due to the worldwide shortage of olives, everyone is ready to turn the page to this year’s new crop year. Tunisia is anticipating an above-average crop of 300,000 metric tons. This is welcome news after the 2016/2017 harvest which only yielded 100,000 metric tons. Italy and Greece are also expecting a better than last year crop but not near the same increase of Tunisia’s olive oil production. Spain’s 2017/2018 olive oil harvest will yield the same amount as their previous year of 1.4 million metric tons. Globally, there should be a 400,000 metric ton increase in olive oil production.
The 2016/2017 year has ended without the normal olive oil carryover of 300,000-400,000 metric tons. Extra virgin olive oil prices have softened in recent weeks, yet the price is still more than 20% higher than 2016 prices. This trend of higher prices should continue into 2018. Market conditions after January will depend on the consumption rates. Consumption of olive oil has continued to climb in Brazil, Australia and China (data courtesy of IOOC July/August newsletter).
We, at Bulk by CHO, are encouraging customers to place their annual contracts in December and January to hedge against market fluctuations.