Brussels to Monitor Olive Oil Prices

Summary

The European Commission is closely mon­i­tor­ing olive oil prices in mem­ber coun­tries, par­tic­u­larly Spain, due to sig­nif­i­cant price decreases despite sta­ble pro­duc­tion for the 2018/19 olive cam­paign. European Commissioner for Agriculture and Rural Development, Phil Hogan, noted mixed sig­nals in olive oil prices and pro­duc­tion across EU coun­tries dur­ing a meet­ing in Luxembourg, with Italy expe­ri­enc­ing high prices and Spain fac­ing very low prices.

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,” 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.

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.

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.

• La Vanguardia