Increased Trade in Olive Oil Futures
By Julie Butler
Olive Oil Times Contributor | Reporting from Barcelona
The Olive Oil Futures Market (MFAO) booked a €213,000 ($280,000) loss last year despite a 28 percent spike in the number of contracts negotiated in it. But its fortunes turned around in the first quarter of this year – as movements in olive oil prices sparked even more trade – seeing it end April with a profit of nearly €136,300 ($180,000).
The market closed 2012 with nearly 98,000 contracts negotiated, up about 21,000 on 2011, and with August and December by far the busiest months.
The average price last year was €2,083/t and the total value negotiated was nearly €204 million, up from €1,660 and €76 million in 2011.
Futures market a “useful hedging tool”
Manuel León, president of the Jaén-based market, told Spanish media that the vast majority of 2012’s trade took place in the last half of the year, when ex-mill prices for olive oil were rising and the outlook was poor for the next harvest.
He said the increase in the number of contracts reinforced the market’s role “in providing a hedge against price volatility.”
“It’s a useful tool for the industry and good price observatory,” he said.
Those most active in the market were big companies. Many smaller companies were still unaware of the advantages of being active in the MFAO, León said.
First quarter recovery
The busiest month in the most recent quarter was January, when 18,000 contracts were negotiated, though leaving the market’s record for the most trade in a month still standing at 23,115 contracts, from January 2010.
The total for the first quarter this year had reached 44,000 by April 23.
More activity online
The MFAO is also enjoying a spike in activity on its web site. Its trading screen received a record (since 2005) number page views – 7.9 million – in 2012, up from 1.4 million in 2011.
The only market in the world where futures contracts on olive oil can be traded, it opened in February 2004 and made its first profit, €116,000, in 2010, but 2011’s flatline prices – reducing the need for buyers or sellers to hedge against price swings – sent it back into the red with a €300,000 loss.
Olive Oil Futures Market (MFAO – Mercado de Futuros Aceite Oliva)
Mercado de Futuros Aceite Oliva aumenta 28% número contratos respecto a 2011
Mercado de Futuros registra 136.000 euros de beneficio en el primer trimestre