EU Aid Not Helping Croatians, Official Says

The third tendering period for European Union producers seeking private storage aid for olive oil has just opened. However, one Croatian olive oil official argues that the aid does not help producers in small countries.

Jan. 27, 2020
By Karmela Hromin

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A new period of ten­der­ing pro­ce­dures con­nected to the European Commission’s olive oil stor­age efforts began in Croatia and the rest of the European Union on January 22.

Storage aid for vir­gin oils was approved by the European Commission in late 2019 to bal­ance the sup­ply and demand of olive oil after prices decreased through­out the trad­ing bloc.

These ten­ders are not appro­pri­ate to cur­rent con­di­tions in the Croatian oil mar­ket because even the min­i­mum quan­tity that can be stored is unat­tain­able to Croatian oil pro­duc­ers.- Jakša Najev, mem­ber of Croatian Committee for Olives and Olive Oil Production

Spain, Portugal and Greece have seen prices drop to unex­pected lows, which have mainly been attrib­uted to good har­vests in the E.U. over the past two years, accu­mu­lat­ing olive oil stocks through­out the bloc and stag­nant con­sump­tion.

The con­tin­ued accu­mu­la­tion of stocks in Spain, the world’s largest olive oil pro­ducer, has also threat­ened to make the cur­rent mar­ket imbal­ance even worse.

See Also: Olive Oil Prices News

All of this has prompted the European Commission to try and pre­vent fur­ther dam­age to the sec­tor.” The aid for vir­gin oil and lam­pante has been set at €0.83 ($0.92) per ton per day, and the oil has to be stored for a min­i­mum of 180 days.

The low­est quan­tity of oil eli­gi­ble for aid is 50 tons, which has led to skep­ti­cism among Croatian indus­try insid­ers regard­ing the suit­abil­ity of such aid mea­sures. Overall, Croatia pro­duced 3,500 tons of olive oil in the 2019/20 crop year, accord­ing to the lat­est fig­ures pub­lished by the International Olive Council, and many of the coun­try’s pro­duc­ers are quite small.

Jakša Najev, a mem­ber of the Committee for Olives and Olive Oil Production at the Chamber of Agriculture in Croatia believes no Croatian olive oil mak­ers will apply for the aid.

These ten­ders are not appro­pri­ate to cur­rent con­di­tions in the Croatian oil mar­ket because even the min­i­mum quan­tity that can be stored is unat­tain­able to Croatian oil pro­duc­ers,” he said. Fifty tons would be about one-third of what one of the largest Croatian mak­ers pro­duce in a year.”

Furthermore, most of Croatian pro­duc­ers make extra vir­gin oil, and European aid was only focused on stor­ing lower qual­ity oils – vir­gin oil and lam­pante,” he added. Extra vir­gin oils are not eli­gi­ble for stor­age, although the European Commission at first announced they would be. These mea­sures will be use­ful only in Spain, where there is a sur­plus of oils. We prac­ti­cally have a short­age.”

Najev has pre­vi­ously stated that Croatian oil pro­duc­ers have over the years made a mis­take of slid­ing into a sort of elit­ism, with vir­gin olive oil being the only inter­est point, fueled by pref­er­ences of local experts, which in turn reduced the pub­lic inter­est for other types of oil.

He believes branch­ing out into pro­duc­ing more lam­pante and vir­gin oils would bring oppor­tu­ni­ties for enter­ing new mar­kets.

The final period of stor­age aid ten­ders in Croatia, Cyprus, France, Greece, Italy, Malta, Portugal, Slovenia and Spain will open on February 20, 2020.





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