Oct. 29 (Bloomberg) -- Global production of olive oil is set to rebound 29 percent from last year, sending prices in Spain to a 10-month low, Oil World said.
Output may gain to 3.38 million metric tons in the 2013-14 season from the prior year’s “unusually low” 2.63 million tons, the Hamburg-based researcher said today in an e-mailed report. Prices for the extra-virgin variety in Spain, the world’s biggest producer, fell to a low of $3.25 a kilogram (2.2 pounds) in the past week, down 13 percent since June, it said.
Spanish output may be 1.5 million tons, more than double last year, when dry weather hurt crops, the report showed. Production in the southern province of Jaen exceeds Greece’s entire national output, according to the Olive Oil From Spain website, set up by groups including Asoliva, which represents Spanish exporters of the oil.
“Olive-oil prices have been under pressure in recent weeks in response to the clear-cut recovery of production in the Mediterranean region,” Oil World said. “In Spain, the much-improved weather conditions will result in a significant recovery of yields and production.”
Rising output in Italy and Portugal may make up for declines in Greece and Tunisia, the researcher said. Some olive trees in Argentina and Chile were damaged by frost, though “the impact on the world market will be relatively small,” according to the report.
Global inventories of olive oil may be 790,000 tons by the end of the season on Sept. 30, up from 650,000 tons a year earlier, when supplies reached a four-year low, Oil World said. Demand in the European Union may gain 2.9 percent this season to 1.8 million tons, rebounding from a 13 percent slump caused by concern about the economy and higher prices for the oil, according to the report.
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