Through its Ministry of Agriculture, Fishery and Food, Spain has formally asked the European Union to act again to combat low prices in the olive oil market.
In a letter signed by Minister Luis Planas, Madrid underlined how beneficial the previous E.U. tenders for private storage had been on the sector.
The letter, sent to the European Secretary of Agriculture Janusz Wojciechowski, comes on the heels of the recent Spanish request that olive oil be included in the Common Market Organization (CMO) Regulation.
The goal of the Spanish Ministry is to have E.U. consider olive oil within a regulative framework of measures and market procedures that will allow the European olive oil sector to be more resilient, a framework already adopted by the E.U. for other agricultural productions.
In his letter and regarding the specific Spanish scenario, Planas underlined that the persistently low prices of olive oil coupled with the Covid-19 restrictions that hit tourism and sale channels such as restaurants and pubs put the olive oil sector under severe pressure.
On top of that, wrote Planas, the consequences of the U.S. trade tariffs are starting to show. Considering the next olive oil season, promising in terms of volume, Madrid stressed the importance of quick European action on the olive oil market.
In his letter, Planas noted that the previous tenders on private storage granted European producers the possibility to withdraw from the market 213,445 tons of olive oil for four months — a period during which every ton withheld was subsidized with €0.83 ($0.91) per day.
Thanks to the market stabilization effect of the tenders, wrote Planas, olive oil prices were defended and the relevant February data showed the promise of the initiative.
But just a few weeks ago, Planas defined the price drop in the market “abnormal and unjust” and anticipated that he would ask for further actions to stabilize the prices so that “at the minimum, they will cover the production costs.”
The Planas letter was welcomed by Spanish organizations of farmers and producers. Cristóbal Cano, head of UPA Jaén, said the letter goes in the right direction and underlined how relevant the price stabilization is for the olive oil market as well as other agricultural sectors hit by the market turmoil following the epidemic.
Cano also said that specific attention must be paid to the traditional olive oil farmers, who are hit the most by the drop of the price of origin.
Similar comments came from Juan Luis Ávila, general secretary of COAG Jaén, who noted that the farmers union had been already asking for a renewal of the private storage tenders for at least another six more months. “This is the path forward,” Ávila added, “because the olive oil sector needs concrete actions.”