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, 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.
We are conscious of the need to ensure that the interests of the sector are protected, should the situation require it.
“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.”
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.