Italian olive oil production is set to drop by 26% this year compared to 2019, according to Confagricultura, a group that represents Italy's agriculture sector.
However, Italy is not the only country to register a negative performance, with other olive oil producers such as Portugal (-35%) and Greece (-25%) also seeing production fall.
In contrast to the other Mediterranean countries, Spain will consolidate its leadership in the sector this year due to a 27% increase in production, which in turn will help lift the overall European olive oil production sector by 5% this year.
Italy, with just over one million hectares of olive groves and more than 400 varieties, is expected to produce an estimated 270,000 tonnes in 2020, with a drop off in production most marked in Puglia, a region that accounts for nearly half of Italian olive oil.
Although a positive output is expected in Central and North Italy, these regions account for only 20% of national production.
Confagricultura points out that 50% of Italian olive oil exports are targeted to four countries: the United States (€420 million, accounting for 32% of the total), Germany (€168 million, 12.8%), Japan (8%) and France (7.4%).
Italy, which is the second biggest olive oil exporter after Spain, has average sales prices 59% higher than its Mediterranean rival, despite the fact that it accounts for 15% of world production on average, compared to 45% for Spain.
According to Confagricoltura, the Italian olive-growing sector is facing strong competition from other EU and non-EU oils at bargain prices, with the local olive oil producers association warning that effective promotion policies are needed to increase demand for extra virgin olive oil both in Italy and on international markets.
On a global level, the olive-growing sector is faced with significant structural changes in a difficult market situation, characterised by a year of strong product stocks that are holding back prices.
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. Click subscribe to sign up to ESM: The European Supermarket Magazine