The EC foresees that the production of olive oil in the EU will increase by 17% in the next season
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  • The EC foresees that the production of olive oil in the EU will increase by 17% in the next season

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The olive oil production of the European Union (EU) could be around 2.2 million tons in the 2020/21 campaign, which would be 17% more than the previous season, according to the autumn report of agricultural perspectives prepared by the European Commission (EC).

This report indicates that, during the summer, the climatic conditions in the Iberian Peninsula were not favorable for olive growers, with some very hot and dry episodes, which has led to lower production estimates for the 2020/21 campaign in Spain , up to 1,550,000 tons; and Portugal, up to 100,000 t. In the case of Italy and Greece, he expects them to follow a pattern of alternation of production, so that Greek production will be 280,000 tonnes and Italian around 290,000 tonnes.

The EU Executive forecasts that EU exports will be lower in 2020/21 (790,000 t.), Due to stocks in some destination countries after record flows, as well as weakened purchasing power around the world. Meanwhile, EU imports could also decrease due to less availability in non-EU countries and less need for re-exports.

Furthermore, it expects a higher growth in EU consumption (3.5%) limited by a decrease in production in Italy and Greece, whose consumers have a strong preference for domestic olive oils; as well as a slow recovery in tourism and restoration, which can contribute to stable stocks.

 

Export record in the 2019/20 campaign

Regarding the 2019/20 campaign, the EC specifies that between October and July, EU exports grew significantly in volume, reaching new records in all the main export destinations. Thus, he points out that shipments to the United States grew by 16%, to Brazil by 32%, to Japan by 3%, to the United Kingdom by 32% and to China by 3%. They all represent around 70% of EU exports.

However, the value of sales abroad in the EU did not grow proportionally, falling by 3% in the United States and around 10% in China and Japan. Although a slowdown in export growth is likely towards the end of the season, due to the high volumes exported in the same period of the 2019/20 season, Community exports could reach a record 820,000 t.

EU imports, of which 90% originate from Tunisia, continued to grow and could reach a historic level in 2019/20 (240,000 t.), Comparable to 2014/15. These growing flows, according to the Commission, are driven by the processing and re-export needs of the EU, which helps to maintain trade relations in certain destinations where some EU exports are restricted due to tariffs (United States).

In the EU, increased production in Italy and Greece, a record harvest in Portugal and strong household consumption in major producing countries due to lockdown boosted consumption, which is expected to increase by 3% despite the reduction of the demand of tourism and restoration. Together with an expected growth in exports, according to the EC, it should contribute to a reduction of stocks by 20%.





Source: Mercacei





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