This consumption from olive oil may face significant rejection when prices rise to high levels. This was announced by the olive sector during a discussion table organized by Diario Córdoba of Grupo Prensa, with representatives from Córdoba oil mills, their cooperatives, administrations such as the Córdoba Provincial Assembly, and organizations like Caja Rural del Sur. Ibérica announced the new Córdoba oil mills Directory, distributed with the newspaper on Thursday.
The year 2023 appears to be “extremely complex,” according to Rafael Sánchez de Puerta, president of Cooperativas Agroalimentarias in Córdoba and managing director of Dcoop. After periods of high commercialization, there is insufficient volume to sustain those levels, and that will affect every part of the supply chain. If last campaign production reached about 1,500,000 tons, next year is expected to fall to around 780,000 tons. The figures are clearly too low for the needs of the industry. [Attribution: Córdoba oil sector representatives]
All-time highs
The industry predicts demand may decline, even as prices reach record highs. Belén Luque, president of Almazaras Industriales de Córdoba, notes that demand could soften. The lower the production, the higher the price, which in turn reduces oil consumption. The primary beneficiary of higher prices is the farmer, who may welcome relief from a bad harvest, yet consumers could start seeking alternative oils. [Attribution: Córdoba oil sector representatives]
Regarding price dynamics, the key factor, according to Antonio Ruiz, head of Diputación, is the balance of supply and demand. A strong commitment to institutional promotion is needed, with other table members echoing the same view. Sánchez de Puerta underscored that ultimately supply and demand must align. [Attribution: Córdoba oil sector representatives]
Thus, as Belén Luque adds, “oil will not run out,” but reduced consumption can make a low production scenario feel more scarce and expensive. This is not good news for factories and cooperatives, which face rising industrial costs, including electricity, driven by inflation and now pressing on business margins. [Attribution: Córdoba oil sector representatives]
One last positive campaign
The sector’s outlook for the campaign cycle starting in 2022-2023 contrasted with the prior year. The recent campaign was described as “pretty good,” noted Ricardo López-Crespo, vice president of Caja Rural del Sur. Sánchez de Puerta added that high production came with favorable adjustments, including robust purges and about three and a half euros per unit for the farmer. [Attribution: Córdoba oil sector representatives]
The year 2022 saw ongoing fluctuations driven by global events such as the war in Ukraine, logistics disruptions, and drought. Although the previous campaign finished with strong production and favorable market value, a lack of rainfall could affect the next year. December rainfall brought some relief, but the industry remains watchful for spring conditions. [Attribution: Córdoba oil sector representatives]
Decline in exports
Exports in the olive oil sector may face disappointment in 2023. The head of Cooperativas Agroalimentarias warned that prices could push some markets out. If monthly production stays around 139,000 tons, next year might see 100,000 to 110,000 tons. On the other hand, Sánchez de Puerta points to potential growth in imports. [Attribution: Córdoba oil sector representatives]
The president of Almazaras Industriales de Córdoba warned that production declines could be severe. Luque noted that the harvest shortfall is not confined to Spain but is also seen in Italy, Portugal, Tunisia, and Greece. Sánchez de Puerta added that low levels of commercialization could further burden the industry. [Attribution: Córdoba oil sector representatives]
Yet López-Crespo disagrees that exports will become a problem for Córdoba’s companies next year. He notes that the United States remains a strong market, supported by a favorable dollar exchange and consistent imports of olive oil. He also downplays concerns about a broad export decline for the province. [Attribution: Córdoba oil sector representatives]