The world's largest olive oil producer predicts that the price of "liquid gold" will decrease by half from its record highs.

• The world's largest olive oil producer, Deoleo of Spain, says that one of the most difficult periods in the industry's history is coming to an end.
• In recent years, the severe impact of climate-fueled extreme weather and drought on olive harvests in southern Europe has resulted in a sudden and astonishing price increase that has left industry experts and consumers alike in a state of disbelief.
• Although prices have decreased, industry experts predict a better harvest in the 2024-2025 season, especially in countries like Spain, Greece, and Tunisia.

The world's largest olive oil producer, Deoleo of Spain, predicts that one of the most difficult periods in the industry's history is coming to an end, with "liquid gold" prices expected to decrease significantly from their all-time high in the upcoming months.

In recent years, the severe impact of climate-fueled extreme weather and drought on olive harvests in southern Europe has resulted in a sudden and astonishing price increase that has left industry experts and consumers alike in a state of disbelief.

The scarcity of olive oil, a vital component of the Mediterranean diet, triggered an industry crisis, fueled concerns about food security, and led to an increase in crime in Spanish supermarkets.

Although prices have decreased, industry predictions indicate that the 2024-2025 harvest season will see significant improvements in key countries such as Spain, Greece, and Tunisia.

Miguel Ángel Guzmán, chief sales officer at Deoleo, stated via email to CNBC that while progress has been made, it is not entirely accurate to claim the crisis has ended.

Olive oil prices, particularly for higher quality Extra Virgin oils, remain in a state of tension, according to Guzmán. Despite some market uncertainty, the olive harvest for the 2024-2025 season is still ahead.

Guzmán stated that although the market is still unstable, the outlook is positive for the coming months, as the new harvest is expected to stabilize the market and gradually restore normality as supply increases.

'A gradual normalization'

The summer presented Deoleo, the producer of popular olive oil brands like Bertolli and Carbonell, with a "perfect storm of challenges," which he deemed "one of the most difficult moments in the history of the sector." In response, he called for a "profound transformation" of the industry.

The price of extra virgin olive oil in Spain's Andalusia region was 6 euros ($6.33) per kilogram on November 6th, according to Expana, a market intelligence firm in the agricultural and food sector. This represents a 19% decrease from the previous month and a 34% reduction from the record high of 9.2 euros in January.

More than 40% of the world's olive oil comes from Spain, which sets the global standard for prices.

Guzmán stated that the relaxation of prices at origin is expected to start between November, December, and January, as long as weather and harvest conditions remain stable in the upcoming weeks.

If rains continue to favor production and everything develops normally, we could see a decline in prices in 2025, he stated.

Olive oil prices should decrease to approximately 5 euros per liter, a significant decrease from the current highs of 9 to 10 euros, which have been common in Spanish supermarkets this year, according to Deoleo.

Guzmán stated that this price would be reasonable if there was an increase in production, which would ease market tensions and allow for a gradual normalization of prices after a period of volatility.

'An existential threat to the industry'

According to Kyle Holland, senior market reporter for oilseeds and oils at Expana, most industry players were "extremely pessimistic" about the future price trend.

"The production numbers are crucial. For Spain, we anticipate approximately 1.3 million metric tons, which is nearly double the previous season's 670,000 to 680,000 metric tons, according to various sources."

In addition to Spain, Expana's Holland predicted that Greece, Tunisia, and Turkey would experience bumper olive harvests this year, with the quality of the olives being "very good."

"The majority of individuals are extremely pessimistic and believe that the prices will not increase due to the excessive supply," he stated.

The industry is facing the need to adapt to an increasingly uncertain future due to climate change, as Deoleo's Guzmán expressed concern over two consecutive years of drought.

Guzmán stated that the olive oil industry is experiencing substantial investments in advanced agricultural technology and the creation of more robust olive cultivars.

He emphasized that climate change poses an existential threat to the industry.