`Barjol: Without U.S., We'd Be 'Drowning in a Sea of Olives'

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Barjol: Without U.S., We'd Be 'Drowning in a Sea of Olives'

Apr. 17, 2012
Julie Butler

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Jean-Louis Bar­jol (file photo)

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

With farm gate prices already at a nine-year low, the IOC says Spain’s bumper har­vest will push end-of-year stocks up to the equiv­a­lent of more than a third of annual world con­sump­tion.

Speak­ing in Madrid at the World Bulk Oil Exhi­bi­tion, IOC exec­u­tive direc­tor Jean-Louis Bar­jol said on Thurs­day that revised IOC fore­casts for 2011/12 set world pro­duc­tion at 3.31 mil­lion tons, up from the 3.09 mil­lion tipped back in Novem­ber. The sea­son opened with 0.8 mil­lion tons in stocks and global con­sump­tion should total 3.08 mil­lion tons, up from just under 3 mil­lion in 2010/11 and largely on the back of increased demand in the United States.

U.S. the sector’s sav­ior”

The U.S. has been for many years been the dri­ver of the olive oil sec­tor,” Bar­jol said. Thanks to the U.S., the sec­tor has been able to grow with­out drown­ing in a sea of olives.”

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Nev­er­the­less, global pro­duc­tion has risen more than con­sump­tion, hence the world stock of olive oil is grad­u­ally grow­ing.” This would be partly off-set next year, how­ever, with a drop in pro­duc­tion in the wake of Spain’s drought this win­ter, he said.

Growth in bulk over bot­tled

In a closer look at the U.S. mar­ket, Bar­jol said that though bot­tled Ital­ian olive oil dom­i­nated imports into the U.S., an inter­est­ing trend was that Spain was gain­ing mar­ket share, and doing so via bulk — not bot­tled — vir­gin olive oil.

He said the IOC would be keenly watch­ing the U.S. Depart­ment of Agri­cul­ture (USDA) Qual­ity Mon­i­tor­ing Pro­gram, which now cov­ers olive oil prod­ucts. It was among ele­ments help­ing main­tain con­sumer con­fi­dence in the qual­ity of the prod­ucts,” he said.

Italy. mean­while, remains the biggest importer in Europe. That’s because over many, many years Italy has devel­oped superb know-how in mak­ing olive oil blends of a recog­nised and con­sis­tent qual­ity and in sell­ing them world-wide,” Bar­jol said.

As reported Fri­day in Olive Oil Times, he said mar­ket research showed a promis­ing trend in China — instead of regard­ing olive oil as an exotic gift for friends, peo­ple were increas­ingly buy­ing it to use them­selves.

The IOC already has pro­mo­tion cam­paigns under­way in coun­tries includ­ing the U.S. and China, another is soon to start in Brazil, and Japan is the pro­posed tar­get of a cam­paign to start late this year.

Pric­ing puz­zle

Com­par­ing olive oil with com­mod­ity prices for other edi­ble oils such as soy, corn, palm and cot­ton­seed, Bar­jol said it was clear that it cost more, which is nor­mal, because it’s not the same as the other edi­ble oils, it has attrib­utes that they don’t.”

There’s a need here for us all to edu­cate con­sumers about why a cer­tain price needs to be paid for this prod­uct,” he said.

But while prices for the other oils tended to move as a group, fluc­tu­at­ing at more or less the same time, olive oil was puz­zling.

Why is it that when prices for all the other oils are on the increase, the price of olive oil doesn’t move, yet when all the oth­ers fall, it falls?”

False fraud claims?

Asked after his pre­sen­ta­tion what more should be done to reduce fraud and mis­la­belling, Bar­jol told Olive Oil Times that he didn’t think the prob­lem was as bad as some made out.

I’m not say­ing that there is none hap­pen­ing but I’m say­ing give me evi­dence with judi­cial assess­ment.

Some peo­ple are mak­ing claims to try to bet­ter sell their own oil.”

We are look­ing for robust sci­ence,” he said. It was for sim­i­lar rea­sons the IOC was con­sid­er­ing orga­niz­ing ring tests to check var­i­ous chem­i­cal test­ing meth­ods, partly as ground­work for next year’s Codex Com­mit­tee on Fats and Oils meet­ing. The IOC remained very proud of its sen­sory test­ing method, he stressed.

Dif­fer­en­ti­ate or die

Bar­jol said stud­ies by Spain’s Olive Oil Agency showed that on aver­age the cost of pro­duc­tion in the coun­try was higher than the prices paid to farm­ers. This meant that mar­ket adjust­ment was inevitable and at some point pro­duc­tion would stop in some of Spain’s tra­di­tional olive groves.

Those whose land has a steep incline will have a big prob­lem and only one solu­tion. They can’t mech­a­nize so they will have to try to value-add by cap­i­tal­iz­ing on her­itage value or dif­fer­ent olive vari­eties if they want to com­pete,” he said.

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