`Olive Council: Rising Consumption Will Spur Price Recovery - Olive Oil Times

Olive Council: Rising Consumption Will Spur Price Recovery

May. 31, 2012
Julie Butler

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The cur­rent olive oil price cri­sis will ease and it will be on the back of pro­mo­tion that woos new con­sumers, the International Olive Council said today.

In a rare pub­lic state­ment from its exec­u­tive sec­re­tariat, the IOC also said that the prob­lem was not struc­tural but had its roots in vari­ables — such as domes­tic pro­duc­tion, stocks and con­sump­tion — in pro­ducer coun­tries, par­tic­u­larly Spain.

The state­ment, titled Some thoughts on cur­rent olive oil prices” comes as the cri­sis cap­tures more world media atten­tion in the wake of a page one splash by the Financial Times on May 28.

The news­pa­per attrib­uted the low pro­ducer prices in Spain, Italy and Greece to falling domes­tic con­sump­tion — due to the eco­nomic cri­sis and com­pe­ti­tion from cheaper veg­etable oils — coin­cid­ing with a bumper har­vest in Spain and con­se­quent glut.

In its con­tri­bu­tion to the debate, the IOC agreed that pro­duc­ers in Spain, Greece and Italy are cur­rently get­ting a low price – €1.75, €2.38 and €1.84/kg respec­tively – for the extra vir­gin olive oil they pro­duce.” But it sees hope on the hori­zon via growth in global demand.

Olive oil accounts for approx­i­mately two per­cent of world con­sump­tion of veg­etable oils, which is ris­ing. As the mid­dle and upper classes expand in numer­ous devel­op­ing coun­tries and become increas­ingly diet and health con­scious, it is rea­son­able to think that the cur­rent price cri­sis is not struc­tural and will be eased by action to pro­mote olive oil to con­sumers who are not famil­iar with it or use it only occa­sion­ally” it said.

Organizations includ­ing the IOC and Spain’s Interprofesional del Aceite de Oliva are engaged in var­i­ous cam­paigns to increase olive oil con­sump­tion both in new mar­kets, such as the United States, Brazil and China, and tra­di­tional ones such as Spain and France.

Current out­look for 2011/12

Based on the lat­est avail­able fig­ures, the IOC expects world olive oil pro­duc­tion to be up 302,000 tons this crop year — an increase of 10 per­cent on last year. This spells a likely year-end global sur­plus of 1 mil­lion tons, a sea­son-on-sea­son increase of 34 per­cent.

Consumption is fore­cast to dip 6.6 per­cent in Greece and to hold steady in Italy but to rise in Spain — the lat­ter the chief dri­ver in the expected 7 per­cent growth in over­all EU con­sump­tion.

Spain’s posi­tion as a coun­try with sur­plus out­put, com­bined with the fact that demand is con­cen­trated in the dis­tri­b­u­tion sec­tor whereas sup­ply is frag­mented, means that any changes in its vari­ables tend to have reper­cus­sions on both national and inter­na­tional prices” the state­ment said.

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