Spanish Officials Determined to Investigate Price Decreases

Summary

Spain is expe­ri­enc­ing a decrease in olive oil prices despite a seven per­cent drop in global oil har­vest com­pared to the pre­vi­ous year, lead­ing to con­cerns among local offi­cials and agri­cul­tural orga­ni­za­tions. Producers are demand­ing excep­tional mea­sures to address the eco­nomic loss, includ­ing acti­vat­ing the pri­vate stor­age sys­tem in the European Union, as prices drop by 30 per­cent in com­par­i­son to last year.

Although global olive oil pro­duc­tion lev­els have dropped com­pared with last year, Spain’s decreas­ing olive oil prices are wor­ry­ing local offi­cials.

“The big con­cern we have is these prices,” Francisco Reyes, the pres­i­dent of Jaén’s Provincial Olive Oil Council, told Europa Press. ​“The [global] oil har­vest dropped by seven per­cent com­pared to the pre­vi­ous year and it is not log­i­cal that prices are in the where they are.”

Agricultural orga­ni­za­tions are demand­ing excep­tional mea­sures be taken in order to put an end to the ongo­ing eco­nomic loss, and are ask­ing the com­pet­i­tive author­i­ties to open an inves­ti­ga­tion.

According to offi­cial data from Poolred and Infaoliva, olive oil pro­duc­ers received an aver­age of €2.38 ($2.70) per liter in February, com­pared to €3.40 ($3.86) per liter in the same month of last year, a 30 per­cent decrease.

In May 2017 the aver­age price per liter was €4.00 ($4.54), the high­est recorded in the past years, and a stag­ger­ing 50 per­cent decrease in com­par­i­son to the cur­rent price.

With the coun­try pro­duc­ing an over­all high-qual­ity har­vest, the pro­duc­ers have stressed that the sit­u­a­tion is par­tic­u­larly ​“odd” since the cam­paign should be a pos­i­tive one that works in their inter­est. At the end of the cam­paign, pro­duc­tion num­bers are expected to be close to 1.8 mil­lion tons.

The some­what veiled cri­tiques of the pro­duc­ers have mainly been aimed at the indus­trial and bot­tling sec­tors, which process and refine their prod­ucts for sub­se­quent mar­ket­ing, and not so much towards super­mar­kets where prices have only slightly decreased.

Currently in super­mar­kets, the prices for olive oils with pri­vate labels ranges from €3.00 ($3.41) and €3.70 ($4.20) per liter.

Meanwhile, the indus­trial and bot­tling sec­tors have rejected these accu­sa­tions, high­light­ing that exports to other coun­tries with low har­vests have not been as suc­cess­ful as expected. Furthermore, the sur­plus has not been absorbed as pro­duc­ers had hoped, with olive oil con­sump­tion at the national level being around half a mil­lion tons.

In Andalusia, where 80 per­cent of all the Spanish olive oil is pro­duced, the agri­cul­tural orga­ni­za­tions Asaja, COAG and UPA have pub­licly advo­cated for the gov­ern­ment to make a request to Brussels to acti­vate the pri­vate stor­age sys­tem. The pri­vate stor­age sys­tem, last acti­vated in 2012, is a mech­a­nism that pro­vides European aid to tem­porar­ily remove the prod­uct from the mar­ket to recu­per­ate the prices.

“The sit­u­a­tion is unsus­tain­able,” COAG said in a state­ment on its web­site. ​“We can­not main­tain these prices when we have such a large dif­fer­en­tial with the rest of the coun­tries. That is why we insist on the need to put in place all the nec­es­sary mea­sures to deal with this cri­sis.”

“COAG has already made pro­pos­als to try to reverse the sit­u­a­tion by inter­ven­ing in the mar­ket, and has peti­tioned to the European Commission to acti­vate pri­vate stor­age,” the state­ment added.

However, European reg­u­la­tion requires that the price in the mar­ket be less than €1.52 ($1.73) for the lam­pante cat­e­gory, €1.71 ($1.94) for the vir­gin oils and €1.78 ($2.02) for the extra vir­gin oils dur­ing the ​“a rep­re­sen­ta­tive period,” none of which apply in this case.

Sources from the afore­men­tioned orga­ni­za­tions have warned that it has been more than a decade since the ref­er­enced prices have been updated and that the pri­vate stor­age sys­tem can be acti­vated ​“when the sec­tor reg­is­ters grave eco­nomic loss.”

The pro­duc­ers stated that they have already encoun­tered great loss with the cost of pro­duc­tion for the extra vir­gin oil, which is around €2.80 ($3.18).

The Minister of Agriculture, Fisheries and Food, Luis Planas, has rec­og­nized that there is ​“a strange behav­ior” being seen in the mar­ket and ensured that the nec­es­sary mea­sures will be adapted to solve the prob­lem.

• La Vanguardia


• Europa Press