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.

“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 more: 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.

“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.