MARKET DEVELOPMENT
Olive Oil Supplies Seen Tight by Oil World as Spain Output Falls
Olive Oil Supplies Seen Tight by Oil World as Spain Output Falls
24/09/2014 (Bloomberg) - Olive oil supplies are “tight,” with prices rising on an outlook for falling production in Spain, the biggest producer and exporter of the edible oil, according to Oil World.
World olive oil production is forecast to drop to 2.87 million metric tons in 2014-15 from 3.44 million tons a year earlier, the Hamburg-based researcher wrote in a report. Spanish output is predicted to slide to 1 million tons from 1.92 million tons, it said.
Prices of virgin olive oil futures traded in Jaen, Spain, have jumped 17 percent in the past 12 months, even as soybean oil futures slumped 23 percent in Chicago and Malaysia palm oil futures dropped 8 percent.
“Supplies are tight by any measurement,” Oil World said. “The necessary demand rationing will be accomplished by higher prices and widening price premiums vis-a-vis other vegetable oils. Markets have responded with a jump in olive oil prices.”
November-delivery olive oil futures closed at 2,505 euros ($3,219) a ton on the Jaen exchange yesterday, up from 2,125 euros a ton two months earlier.
EU consumption of olive oil may fall 100,000 to 120,000 tons in the year through September 2015 in response to high prices from 1.85 million tons in 2013-14, with consumers shifting to sunflower-seed oil and other vegetable oils. according to Oil World.
Spanish production suffered from deficient rainfall in Andalusia, the main growing region, while olive trees were exhausted after bearing record crops last year, Oil World said.
Italy will have to diversify purchasing, buying more olive oil from North Africa and the Near East to compensate for a reduction in Spanish export supplies, according to the report. Italian olive-oil production covers about two thirds of the country’s requirements, prompting net imports of about 200,000 tons, Oil World wrote.
World olive oil production is forecast to drop to 2.87 million metric tons in 2014-15 from 3.44 million tons a year earlier, the Hamburg-based researcher wrote in a report. Spanish output is predicted to slide to 1 million tons from 1.92 million tons, it said.
Prices of virgin olive oil futures traded in Jaen, Spain, have jumped 17 percent in the past 12 months, even as soybean oil futures slumped 23 percent in Chicago and Malaysia palm oil futures dropped 8 percent.
“Supplies are tight by any measurement,” Oil World said. “The necessary demand rationing will be accomplished by higher prices and widening price premiums vis-a-vis other vegetable oils. Markets have responded with a jump in olive oil prices.”
November-delivery olive oil futures closed at 2,505 euros ($3,219) a ton on the Jaen exchange yesterday, up from 2,125 euros a ton two months earlier.
EU consumption of olive oil may fall 100,000 to 120,000 tons in the year through September 2015 in response to high prices from 1.85 million tons in 2013-14, with consumers shifting to sunflower-seed oil and other vegetable oils. according to Oil World.
Spanish production suffered from deficient rainfall in Andalusia, the main growing region, while olive trees were exhausted after bearing record crops last year, Oil World said.
Italy will have to diversify purchasing, buying more olive oil from North Africa and the Near East to compensate for a reduction in Spanish export supplies, according to the report. Italian olive-oil production covers about two thirds of the country’s requirements, prompting net imports of about 200,000 tons, Oil World wrote.