`More Storage Aid for Virgin Olive Oil - Olive Oil Times
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More Storage Aid for Virgin Olive Oil

By Julie Butler
May. 17, 2012 13:17 UTC

For the third time in eight months, the European Commission is to sub­sidise the tem­po­rary with­drawal of olive oil from the mar­ket in the hope rock bot­tom farm gate prices improve. An EC com­mit­tee today (May 16) voted in favor of pri­vate stor­age aid (PSA) to cover 100,000 tons of vir­gin and extra vir­gin olive oil for up to 180 days.

The aid will be avail­able in all EU pro­ducer coun­tries, namely Cyprus, France, Greece, Italy, Malta, Portugal, Slovenia and Spain. It is allo­cated via a ten­der process and the first offers will be accepted start­ing on May 31, a spokesman for European Commissioner for Agriculture Dacian Cioloş told jour­nal­ists in an email.

Prices

The rep­re­sen­ta­tive price for EVOO in Spain has been below the rel­e­vant PSA trig­ger — 177.90 €/100 kg — for sev­eral weeks, he said. Prices were sta­ble in Greece and Italy, but much lower than last year.

Virgin olive oil prices in Spain and Greece have been below their trig­ger of 171,00 €/100 kg for many weeks and ​“are con­sid­er­ably lower than last year”.

For the week to May 6, the rep­re­sen­ta­tive prices for EVOO were: Spain 176.67, Italy 240 and Greece 182.50 €/100 kg. For vir­gin olive oil they were 169.79, 178 and 160.50 respec­tively.

Reaction

Pekka Pesonen, Secretary-General of European farm­ers’ union Copa-Cogeca, wel­comed the move. ​“The mar­ket is in seri­ous cri­sis. Producers are being squeezed by low prices and high pro­duc­tion costs. This sit­u­a­tion is unbear­able for pro­duc­ers who have seen their income dete­ri­o­rate con­stantly over the past six years. Eurostat fig­ures show EU olive oil prices were also only half that of their level in 2002 (-47.8%) in real terms. This crop is vital for the main pro­duc­ing coun­tries – Spain, Italy, Greece, Portugal, France – in terms of main­tain­ing employ­ment in their rural areas” he said.

Chairman of Copa-Cogecas’ Olive Oil Working Party, Rafael Sanchez de Puerta, said the union hoped that the action plan for the sec­tor promised last month by Cioloş would include mea­sures to help con­cen­trate sup­ply and strengthen farm­ers’ posi­tion­ing in the food chain.

Luis Planas, Andalusia’s Agriculture, Fisheries and Environment Minister, and the UPA, a pro­fes­sional body for small-scale farm­ers, said that PSA was not the defin­i­tive answer — the solu­tion lay with con­cen­trat­ing sup­ply and open­ing up new, for­eign mar­kets.

Previous inter­ven­tion

Back in February, Cioloş announced that the EC was will­ing to spend up to €20 mil­lion to sub­sidise the tem­po­rary stor­age of 100,000 tons of extra vir­gin and vir­gin olive oil for for up to four months. All the oil later accepted for this PSA came from Spain.

This fol­lowed a round of PSA approved in October last year, that time for 100,000 tons of vir­gin olive oil for up to six months, though the full quota was not reached.

The world is poised for an olive oil glut of more than 1.1 mil­lion tons this year, accord­ing to International Olive Council esti­mates.

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