Brussels to Monitor Olive Oil Prices

Olive-producing countries are showing mixed signals in terms of prices and production despite the market’s relative stability, according to an EU commissioner.

Photo courtesy of Fred Romero
Apr. 18, 2019
By Rosa Gonzalez-Lamas
Photo courtesy of Fred Romero

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The European Commission will mon­i­tor olive oil prices in mem­ber coun­tries, such as Spain, where they have decreased sig­nif­i­cantly in spite of a rather sta­ble pro­duc­tion for the 2018/19 olive cam­paign.

Phil Hogan, European Commissioner for Agriculture and Rural Development, said dur­ing a meet­ing in Luxembourg that olive pro­duc­ing coun­tries within the European Union are show­ing mixed sig­nals in terms of prices and pro­duc­tion despite the market’s rel­a­tive sta­bil­ity.

Although at the E.U. level there are no par­tic­u­lar signs of mar­ket dis­tur­bances, my depart­ment will closely mon­i­tor devel­op­ments at Member State level in the com­ing weeks- Phil Hogan, European Commissioner for Agriculture and Rural Development

Although at the E.U. level there are no par­tic­u­lar signs of mar­ket dis­tur­bances, my depart­ment will closely mon­i­tor devel­op­ments at Member State level in the com­ing weeks,” Hogan said.

Examples of this are the high olive oil prices in Italy, caused by a low yield that was due to dif­fi­cult weather and Xylella fas­tidiosa, and the very low prices found in Spain, a coun­try that enjoyed a very good cam­paign.

See Also: Olive Oil Prices

In Andalusia, where the vast major­ity of Spanish olive oil is pro­duced, some described the 2018/19 cam­paign as atyp­i­cal, with good yields in terms of vol­ume, aver­age qual­ity and lower extrac­tion lev­els because of an inad­e­quate pro­por­tion between olive pulp and skin.

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This was caused by an irreg­u­lar cli­mate through­out the cam­paign, which fea­tured episodes of untimely rain and high tem­per­a­tures dur­ing the olive cycle. Consequently, there was a lack of uni­for­mity in fruit size and mat­u­ra­tion as a result of which many fruits had not yet pro­duced oil at the moment of their pick­ing. This led to a lower fat con­tent, less intense early extra vir­gin olive oils and dif­fi­cul­ties at the time of grind­ing which required the addi­tion of water to the paste and a result­ing cor­rec­tion dur­ing extrac­tion.

In January, esti­mates released by the European Commission indi­cated that olive oil pro­duc­tion num­bers for the 2018/19 olive har­vest in the European Union were expected to remain rather sta­ble at 2.375 mil­lion tons, only 1.4 per­cent below the 2017/18 cam­paign yield.

This con­trasts with the 5.5 per­cent decrease in global oil pro­duc­tion expected for the 2018/19 as per the esti­mates pro­vided by the International Olive Council (IOC) to Olive Oil Times. Tunisia and Argentina, with har­vests drop­ping between 55 and 57 per­cent, were crit­i­cal in this decline.

Spain was expected to make up for 75 per­cent of the European Union’s olive pro­duc­tion in the 2018/19 sea­son and more than 50 per­cent of the global pro­duc­tion. Italy, the sec­ond largest global olive oil pro­ducer saw its pro­duc­tion fall by 38 per­cent. Greece and Portugal also had 35 per­cent and 20 per­cent decreases, respec­tively.

According to esti­mates from the European Commission, Spanish olive pro­duc­tion increased by 26.6 per­cent in 2018/19, when pro­duc­tion reached 1.76 mil­lion tons, a fig­ure higher than the 1.39 mil­lion tons from the pre­vi­ous year. This pro­duc­tion vol­ume has enabled Spain to com­pen­sate the decreases of other pro­duc­ing coun­tries in the European Union.

Luis Planas, Spain’s Minister of Agriculture, Fishing and Food, is in con­stant con­tact with the European Commission to mon­i­tor the mar­ket evo­lu­tion. He rec­om­mended self-reg­u­la­tion to ensure that prices do not go too low. He also asked the Interprofessional Body for Spanish Olive Oil to develop a pro­posal address­ing strate­gies to han­dle demand and prices for olive oil, which will be pre­sented to the European Commission.

Planas is con­fi­dent that this self-reg­u­la­tion will lead to a price increase, pre­vent­ing the need to depend on pri­vate stor­age to con­trol offer and demand, with­draw­ing lower level cat­e­gories from the mar­ket in order to keep rea­son­able prices. Currently, olives have an aver­age price of €2.40 per kilo­gram and the Minister expects this would not go lower than €1.78.

The last time pri­vate stor­age was allowed was back in 2012. The pro­ce­dure is a com­pli­cated and time-con­sum­ing deci­sion that must be rat­i­fied by the European Commission and a num­ber of its mem­ber coun­tries.





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