The worst drought in Europe in 500 years is expected to lower the yield to only 1.7 million tons in the 2022/23 crop year
Growers in Spain, the world’s largest olive oil producer, predicted a 50% decline in production. Meanwhile, authorities in Tunisia, Italy and Portugal also anticipate significant production decreases this year.
The Italian domestic market accounts for approximately 600,000 tons of extra virgin olive oil sales each season. However, recent estimates predict that only a third of this will be provided, owing to a series of catastrophic climate events ranging from storms to drought. Imports will fill the gap, which brings to the forefront the origin of Italian EVOO exports.
Italy’s National Confederation of Independent Farmers (Coldiretti) warned that extra virgin olive oil might reach a record retail price of €10 per liter as every part of the supply chain, from production and packaging to labeling and transport, is burdened by cost increases of 30 to 170 percent.
According to the E.U. projections, olive oil volumes will fall in all producing countries, with the notable exception of Greece, which will move back to 2nd place behind Spain and ahead of Italy in the global production order. But early harvest auctions have already pushed the price of a liter of Laconia EVOO producers to above €5.00. The only good news is that the USD: EUR exchange rate parity remains at 1:1.