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What will happen to European olive sector till 2020?

The prospects have been established on the basis of a detailed statistical analysis that takes into account the main historical trends and the foreseeable evolution of the sector over the next years

The Agricolture and Rurale Department of European Commission prepares a report, and a outlokk, on olive oil sector till 2020.
Projections are determined for three EU Member States separately: Spain, Italy and Greece.

Olive oil production in Spain could reach 1.68 mio tonnes by 2020 under the assumption of "average" climatic conditions, this value varying possibly between 1.43 and 1.86 mio tonnes in case of extremely low or high yields seasons respectively.
Olive oil consumption in Spain over the projection period is assumed to remain stable in per-capita terms at 13.0 kg/year, which represents the average consumption over the past decade. Taking into account a modest population increase, this could bring Spanish olive oil consumption to 632000 t by 2020.
Spanish olive oil exports until 2020 are expected to follow the increasing trend displayed in the recent past, with a stronger development for trade flows destined outside the EU compared to exports on the EU market. Overall, total exports would grow from 840 000 t in 2011 to 1.047 mio t in 2020.
Oil imports are projected to stay roughly unchanged over the projection period, at a level between 40000 and 50000 t, which coincides with the historical average of the recent past.
On the basis of these projections, we ran a scenario to simulate the possible development of olive oil stocks in Spain until 2020, assuming that the years from 2012 to 2020 would register 3 high-yield, 3 average-yield and 3 low-yield harvests. According to this simulation, the cumulated production and imports over the projection period would outweigh the corresponding cumulated consumption and exports, with an average annual accumulation of 27 000 t of stocks. Total stocks of olive oil in Spain could therefore increase from 635000 t at the end of the marketing year 2011/12 to 881000 t at the end of 2020/21.

Oil yields in Italy are expected to slightly decrease from 459 kg oil/ha in 2011 to 418 kg in 2020, following the declining trend registered in the last years. As a result, total olive oil production would fall from 538 to 477 thousand tonnes over the same period.
Olive oil consumption has also been on a declining path for some years now, therefore we assume that it would continue to decrease, from 660 000 t in 2011 to about 620 000 t in 2020.
As regards trade, Italy is expected to remain a significant net importer of olive oil, despite the trade deficit becoming smaller at the horizon 2020. Given that the level of imports has shown high variability but no clear trend over the last decade, we assume that imports would amount to slightly less than 500 000 tonnes for the whole period until 2020. On the other hand, we project that Italian exports would continue the positive trend of the last decade to reach around 360 000 tonnes by 2020.
At the end of the projection period, the final stocks of olive oil in Italy would be approximately unchanged compared to the current situation, with an insignificant annual reduction of 2 700 tonnes per year. This means that we do not expect any major imbalance in the Italian olive oil sector, at least under the assumption of "normal" climatic conditions.

Yields are projected to be significantly declining, to settle at 351 kg oil/ha in 2020. Thus, olive oil production would be slightly falling during the projection period, from 310 000 t in 2011 to 270 000 t in 2020.
Greek olive oil consumption is also projected to decrease - from 228 000 t in 2011 to 202 000 t in 2020 – following the trend of the previous years.
In the past, Greek exports of olive oil have varied considerably from year to year, although a downward trend seems to emerge over the time. For the period until 2020, exports are assumed to continue the slight fall, to reach 82 000 at the end of the projection period. Finally, Greek oil imports are negligible and are projected to remain at around 3 000 tonnes over the period 2011-2020, similar to the average of the previous years.
Under the usual assumption of "average" harvests throughout the projection period, the olive oil sector in Greece would result to be roughly balanced, with a small deficit of 11000 tonnes per year, or about 4% of the expected production.

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by Alberto Grimelli
06 august 2012, World News > Europe