Production

At its recent session, held on 17 to 21 November 2008, the IOC Council of Members established the balance sheets for olive oils and olive-pomace oils and table olives for the 2007/08-crop year. Summarized figures are attached at the end of this commentary.

Global olive oil production reached some 2 664 000 t. As already mentioned in previous commentaries, this figure is below the initial forecasts. The main reason for this result is the very limited olive oil production in

Italy which eventually stands at 404 000 t. Syria and Turkey also produced considerably less than the season before.

In 2007/08 world production of table olives reached the level of some 2 153 500 t.

The current estimates for production in 2008/09 for both olive oil and table olives look very good. Favorable weather conditions in the most of the olive producing regions over recent months, coupled with sufficient rainfall in the critical periods of olive fruit development, augur well for a good or very good harvest. In the case of Spain, recent adverse weather is expected to have a marginal impact on the harvest expected for this year.

Admittedly, the harvest has just got underway. This means it is still early days to have a clear idea of the final expected level of production but, according to the information we have and to the discussions at the meeting

of the IOC Advisory Committee on 17 November, some 2 866 000 t of olive oil are expected to be produced in the 2008/09 marketing year.

Producer prices have continued downwards on all the principal markets during this period.

Consumption.

All the information available indicates that so far consumption of olive products has been keeping to normal, pre-established patterns.

World trade

In general, the export trade in olive oil and table olives is doing well and keeping to the same trend as in previous months. Spanish export performance is exceptionally good, with exports of olive oil up by 12.4% compared with the average level of the previous four years.

Price movements

The weekly changes in producer prices for extra virgin olive oils and refined olive oils in the main EU producing countries are charted in Graphs 1 and 2. They show a picture at the end of November 2008 where:

l         the prices of virgin olive oil have continued to fall. The price level is too low and is causing serious concern to producers. Producer profit margins are only considerable when harvest is fully mechanized.

l         Compared with the year before, the prices fetched for extra virgin olive oils were lower by 14% in Spain, 30% in Greece and 22% in Italy. (Graph 1).

l         The prices for refined olive oil were lower than a year ago, going down by 16% in Spain and 11% in Italy (Graph 2).

Graph 1 about the price extra virgin olive oil

Graph 2 about the price of refined olive oil