EU Aid Not Helping Croatians, Official Says

Summary

The European Commission ini­ti­ated new ten­der­ing pro­ce­dures for olive oil stor­age in Croatia and the EU on January 22, fol­low­ing approval of stor­age aid for vir­gin oils in late 2019 to address imbal­ances in sup­ply and demand caused by decreased prices. Croatian oil pro­duc­ers are unlikely to ben­e­fit from the aid mea­sures due to the min­i­mum quan­tity require­ments being unat­tain­able for most, with skep­ti­cism aris­ing over the suit­abil­ity of the aid for the Croatian mar­ket com­pared to other EU coun­tries fac­ing olive oil sur­plus issues.

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.

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.

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.

• AgroBiz


• European Commission


• European Commission