Agriculture Minister's Plea Bespeaks Turmoil in Spain's Olive Oil Sector

Distress on the international market, the COVID-19 aftermath and U.S. tariffs on imports stir the world's largest olive oil producer.
Minister of Agriculture, Fisheries and Food, Luis Planas
May. 27, 2020
Paolo DeAndreis

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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. 

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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.”



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