EU Agriculture Commissioner Pledges Support for Spanish Olive Sector

Phil Hogan has promised to intervene in order to protect the interests of Spanish olive oil producers if prices do not rebound. Varied production forecasts and trade uncertainties make it unclear whether this will happen.

Phil Hogan. Photo courtesy of the 2017 Estonian presidency of the Council of the European Union
Aug. 29, 2019
By Daniel Dawson
Phil Hogan. Photo courtesy of the 2017 Estonian presidency of the Council of the European Union

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Phil Hogan, the European Commissioner for Agriculture and Rural Development, said he is mon­i­tor­ing olive oil prices in Spain and ready to inter­vene to pro­tect the inter­ests of the sec­tor.

Hogan made the com­mit­ment to Clara Aguilera García, Spain’s newly elected Member of the European Parliament from Andalusia, in a let­ter sent to the MEP ear­lier this month.

We are con­scious of the need to ensure that the inter­ests of the sec­tor are pro­tected, should the sit­u­a­tion require it.- Phil Hogan, European Commissioner for Agriculture and Rural Development

I want to assure you that the [European] Commission is aware of the olive oil sit­u­a­tion in Spain and is mon­i­tor­ing devel­op­ments closely,” he wrote in the let­ter. We are con­scious of the need to ensure that the inter­ests of the sec­tor are pro­tected, should the sit­u­a­tion require it.”

Hogan attrib­uted the low prices being paid to pro­duc­ers for olive oil in all of its frac­tions to the record-high level of pro­duc­tion that Spain expe­ri­enced in the pre­vi­ous crop year, which along with imports, have far out­paced both con­sump­tion and exports.

See Also: Olive Oil Price News

Spain is esti­mated to have a sur­plus of 880,000 tons of olive oil from 2018/19 alone, accord­ing to data from the International Olive Council.

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As a result, dri­ven by the increased sup­ply and high esti­mated end­ing stocks, prices paid to pro­duc­ers have been steadily decreas­ing dur­ing the entire har­vest­ing period,” Hogan wrote.

According to the most recent data from Poolred, an orga­ni­za­tion that tracks olive oil prices, extra vir­gin olive oil is sell­ing for an aver­age of €2.445 per kilo­gram, which is the sec­ond-low­est point in the past month, but sig­nif­i­cantly higher than the his­toric lows reached in June.

Increased domes­tic con­sump­tion, com­bined with the first esti­mates for the upcom­ing mar­ket­ing year, explain the recent increase in prices,” Hogan wrote. The same price devel­op­ments can be observed for other olive oil cat­e­gories.”

However, a sig­nif­i­cantly lower yield is expected in the 2019/20 crop year in Spain while other major olive oil pro­duc­ers are antic­i­pat­ing bumper crops.

These var­ied pro­duc­tion esti­mates along with poten­tial tar­iffs on European Union olive oil exports to the United States, has made it dif­fi­cult for the European Commission and local experts to guess how olive oil prices will be impacted.

We are also con­scious of the poten­tial impact on olive prices aris­ing from the pos­si­ble impo­si­tion of tar­iffs by the U.S.,” Hogan wrote. The impact on olive oil prices, or those of any other prod­uct, will depend on the level of any new tar­iffs.”

The agri­cul­ture com­mis­sioner con­cluded the let­ter by invit­ing Aguilera García to meet with him and dis­cuss the issue fur­ther at the next ple­nary ses­sion of the European Parliament, which begins on September 16.

By then, the European Commission will know whether tar­iffs on olive oil exports will be imposed and have a bet­ter idea of what the 2019 har­vest will look like.

Aguilera García has not pub­licly accepted Hogan’s invi­ta­tion to fur­ther dis­cuss the issue but indi­cated she was pleased by the con­tents of the let­ter. She did not respond to a request for com­ment on this story.


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