`In Italy, Spanish Olive Oil Prices Too Good to Pass Up

Europe

In Italy, Spanish Olive Oil Prices Too Good to Pass Up

Sep. 28, 2010
Daniel Williams

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The low price of Span­ish olive oil has resulted in rival pro­ducer Italy buy­ing a lot more of it lately. Dur­ing the first five months of 2010, Span­ish exports to its trans-alpine rival have jumped some 19% in value and 16% in vol­ume, reach­ing some 160,000 tons accord­ing to fig­ures from the Ital­ian National Insti­tute of Sta­tis­tics (ISTAT)- an orga­ni­za­tion whose net­work of regional offices is respon­si­ble for com­pil­ing national infor­ma­tion which is then pub­lished from its head­quar­ters in Rome.

Italy imported 240,000 tons of Span­ish olive oil through May of this year, total­ing 474 mil­lion euros. This is a sig­nif­i­cant increase from the 400 mil­lion euro import expen­di­ture in 2009 and one that can be attrib­uted to Spain’s incom­pa­ra­bly cheap prod­uct in the midst of a world­wide pric­ing cri­sis. Of the total olive oil imported by Italy, two-thirds are from Spain.

ISTAT pre­dicts Ital­ian imports of Span­ish olive oil will grow some 41.5% in vol­ume and 50% in value.

Other export­ing coun­tries like Greece and Tunisia are not doing as well with their exports to Italy. In the first 5 months of 2010, Greek olive oil exports to Italy have fallen some 18% while Tunisian sales have dropped by 30%.

But Turkey is the biggest loser in the Ital­ian olive oil mar­ket, strug­gling with a stag­ger­ing 70% reduc­tion in busi­ness vol­ume. France and Por­tu­gal also have lost ground in sales to Italy, while up and com­ing pro­ducer Aus­tralia has man­aged a gain.

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Of the spe­cific grades, Ital­ian imports of vir­gin and extra vir­gin olive oil have jumped 23% in vol­ume, but it is the impor­ta­tion of olive pomace oil, oil extracted via the use of chem­i­cal sol­vents from the olive pomace or left­overs, which have risen most sig­nif­i­cantly. Olive pomace oil imports by Italy have jumped 54% com­pared to the first few months of 2009.

This increase in imports of lower qual­ity oil to Italy speaks to larger mar­ket trends which show that price, rather than qual­ity appears to be the most sig­nif­i­cant fac­tor dom­i­nat­ing the sale of olive oil at present. As prices have reached all-time lows and more peo­ple have been afforded access to olive oil of all grades, the cheap­est prod­uct seems to be the one win­ning out.

Spain, the world’s largest pro­ducer, still boasts the most afford­able olive oils, but this has come at a price as the world pric­ing cri­sis has given rise to a num­ber of fraud cases includ­ing the adul­ter­ation of olive oils and var­i­ous mis­la­bel­ing schemes while Span­ish olive farm­ers still strug­gle to make a liv­ing. Accord­ing to a yearly review by the Foun­da­tion of Rural Stud­ies, 24% of Span­ish farm­ers grow­ing olives for olive oil pro­duc­tion saw their incomes fall dur­ing 2009.

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