Italian Producers Grapple with Market Instability

Italian olive oil pro­duc­tion is steadily declin­ing. In the cur­rent sit­u­a­tion of height­ened uncer­tainty, the down­ward trend is spread­ing con­cern across Italy’s entire olive oil sec­tor.

“This year, too, the cli­mate cri­sis has had a sig­nif­i­cant impact on the south­ern regions, which account for two-thirds of our olive pro­duc­tion,” Andrea Carrassi, gen­eral direc­tor of the national pro­duc­ers asso­ci­a­tion Assitol, told Olive Oil Times.

“In the cen­tral-north­ern regions, how­ever, a good har­vest is expected, though unfor­tu­nately insuf­fi­cient to off­set the decline in the south,” he added.

“Adding to this sce­nario is that the 2024/25 crop year rep­re­sents an ​‘off-year,’ with pro­duc­tion far below aver­age. As a result, we will have to import over 75 per­cent of our needs,” Carrassi noted.

Historical data from the International Olive Council (IOC) shows that Italy pro­duced an aver­age of almost 500,000 met­ric tons of olive oil annu­ally dur­ing the 1990s.

In the fol­low­ing decade, that aver­age rose to nearly 600,000 tons. Between 2010 and 2019, aver­age annual pro­duc­tion fell to just under 357,000 tons. Over the past five years, pro­duc­tion exceeded 300,000 tons only twice.

Estimates for the 2024/25 crop year remain low for the cur­rent year, and pro­duc­ers also face severely dimin­ished olive stocks.

According to ICQRF-Frantoio Italia, Italian extra vir­gin olive oil stocks reached 70,300 tons at the end of October 2024, 43 per­cent of which were of Italian ori­gin.

These fig­ures are sig­nif­i­cantly lower than the almost 100,000 tons reported in the same period last year.

In this con­text, the Italian Institute of Statistics recently high­lighted how higher olive oil prices boosted the export value of Italian olive oil. In the first eight months of 2024, it sur­passed €2 bil­lion, exceed­ing the total for 2023.

In its lat­est report, the Public Institute for Services to the Agri-food Market (Ismea) noted that Italy remains the sec­ond-largest olive oil exporter and the most sig­nif­i­cant con­sumer.

“Supplies from other Mediterranean coun­tries, pri­mar­ily Spain, account for nearly 50 per­cent of our needs, tightly inter­twin­ing the fate of domes­tic pro­duc­tion with for­eign mar­kets, par­tic­u­larly regard­ing price fluc­tu­a­tions,” the report stated.

According to Elia Pellegrino, pres­i­dent of the olive oil millers national asso­ci­a­tion, Aifo, low-yield esti­mates were overly opti­mistic.

“We have seen this com­ing since September, and we said that repeat­edly for weeks: yields will be down by 70 per­cent or even 75 per­cent. Way lower than those esti­mates pro­ject­ing only a 30 per­cent drop over the last year,” Pellegrino told Olive Oil Times.

He also pointed to the share of olive oil pro­duc­tion des­tined for self-con­sump­tion. ​“We are prob­a­bly talk­ing about 30 per­cent of the over­all yields,” he noted.

“That means Italian olive oil vol­umes on the mar­ket will be largely insuf­fi­cient. Prices for the full, true Italian national prod­uct will fol­low up on that and stay high,” Pellegrino added.

While prices in Spain, the largest pro­duc­ing coun­try, are trend­ing down­ward, they are steadily ris­ing across south­ern Italian mar­kets, accord­ing to Ismea data.

Large pro­duc­ers recently pre­dicted a sig­nif­i­cant price reduc­tion in the most impor­tant mar­kets as the sea­son pro­gresses.

Many Italian pro­duc­ers fear prices could fall sig­nif­i­cantly in the com­ing months.

Such a decrease would impact mar­gins already strained by var­i­ous fac­tors, includ­ing chal­leng­ing weather, low yields, labor short­age and ris­ing costs for milling, bot­tling and logis­tics.

David Granieri, pres­i­dent of the olive oil pro­duc­ers asso­ci­a­tion Unaprol, warned that ​“large multi­na­tional cor­po­ra­tions are aim­ing to halve the value of our green gold.

“An olive oil sold at rock-bot­tom prices is nei­ther Italian nor of qual­ity; Italian extra vir­gin olive oil must main­tain a min­i­mum price to pro­tect olive grow­ers and millers, who ensure excel­lent qual­ity despite the chal­lenges,” he said.

“The sup­ply chain must rec­og­nize a fair value for pro­duc­ers: with­out them, there is no future for Italian extra vir­gin olive oil,” Granieri added.

President of Confagricoltura’s olive oil fed­er­a­tion, Walter Placida, added that the sec­tor must work together to pro­tect pro­duc­ers of regional and less com­mer­cial vari­eties. 

“We can­not reduce every­thing to a mere alge­braic cal­cu­la­tion,” he said. ​“Never before has Italian oil been so rare and pres­ti­gious as in this sea­son; never before has it deserved such recog­ni­tion, espe­cially in a sea­son dev­as­tated in terms of pro­duc­tion by extreme alter­na­tions and acute cli­matic events.”

“The true value of Italian extra vir­gin olive oil must be acknowl­edged,” Placida added. ​“We must pay close atten­tion to spec­u­la­tion and attempts to drive prices down, call­ing on all stake­hold­ers in the sup­ply chain to act respon­si­bly, with the sup­port of insti­tu­tions.”

The whole sec­tor is now mobi­liz­ing to address the cur­rent sit­u­a­tion.

Apulian farm­ers, pro­duc­ers and millers recently signed what has been dubbed the ​“eth­i­cal pact.”

The pact aims to ensure that all play­ers in the pro­duc­tion chain, start­ing with olive grow­ers, receive fair income while min­i­miz­ing price spec­u­la­tion.

The Italian gov­ern­ment recently estab­lished the ​“round tech­ni­cal table for olive oil and table olives” with a decree from the Ministry of Agriculture, Food Sovereignty and Forestry.

Many stake­hold­ers have wel­comed the ini­tia­tive, which involves national and regional gov­ern­ment offi­cials, pub­lic agri­cul­tural agen­cies and rep­re­sen­ta­tives from farm­ers, millers, bot­tlers and pro­duc­ers.

It aims to draft a com­pre­hen­sive national plan out­lin­ing pri­or­i­ties and poli­cies to advance the sec­tor.

The role of large food retail­ers in deter­min­ing olive oil prices for con­sumers is piv­otal, and many asso­ci­a­tions are call­ing for improved dia­logue with these key mar­ket play­ers.

“Looking at the offi­cial data, until a few months ago, and after years of hard­ship, remu­ner­a­tion for grow­ers reached record lev­els, unprece­dented until now,” Carrassi said. ​“However, ​‘under­rat­ing’ fac­tors per­sist, which Assitol has been high­light­ing for years, chief among them being the issue of under­pric­ing.” 

“Continuous pro­mo­tions, which we have crit­i­cized for a long time, have deval­ued the prod­uct, treat­ing it like any com­mod­ity and impact­ing the entire sup­ply chain, which is forced to oper­ate with­out fair com­pen­sa­tion, par­tic­u­larly in the agri­cul­tural sec­tor,” Carrassi warned.

He wor­ries that these pro­mo­tions have turned olive oil into another low-cost condi­ment in the minds of con­sumers.

“Thankfully, the last cam­paign has shifted this per­spec­tive, at least par­tially: we should learn from the past year and strive to ensure that olive oil is finally given the recog­ni­tion it deserves, avoid­ing the pro­lif­er­a­tion of heavy dis­counts,” Carrassi said.

Olive Oil Times con­tacted some of the largest food retail­ers in Italy, but none responded before pub­li­ca­tion.