`High Prices Blamed for Drop in Spanish Exports - Olive Oil Times

High Prices Blamed for Drop in Spanish Exports

Nov. 16, 2021
Daniel Dawson

Recent News

Resurgent olive oil prices in Spain have been a bless­ing for pro­duc­ers, but some offi­cials warn that higher prices at ori­gin are hurt­ing exporters.

The Spanish Association of Olive Oil Exporting, Industry and Commerce (Asoliva) warned that these high prices, which have almost dou­bled since hit­ting a low point in June 2020, are dis­tort­ing for­eign mar­kets. Some of these dis­tor­tions have resulted in decreas­ing exports.

Prices at ori­gin have risen 70 per­cent in Spain. As this rise is being passed on to inter­na­tional sales, exports go down.- Rafael Pico Lapuente, exec­u­tive direc­tor, Asoliva

Asoliva’s announce­ment came on the back of new data pub­lished by the Spanish Customs Department and the Food Information and Control Agency (AICA), which show that bulk olive oil exports fell by 18 per­cent from May to September 2021, com­pared with the same period in 2020. In addi­tion, bot­tled olive oil exports also fell by five per­cent over the same period.

See Also: Olive Oil Trade News

The decline comes after the value of olive oil exports from Andalusia – the world’s largest olive oil-pro­duc­ing region by a wide mar­gin – grew by 22 per­cent in the first half of 2021, com­pared with the same period in 2020.

Prices at ori­gin have risen 70 per­cent in Spain,” Rafael Pico Lapuente, Asoliva’s exec­u­tive direc­tor, told Olive Oil Times. As this rise is being passed on to inter­na­tional sales, exports go down.”

Advertisement

While there is no exact agree­ment on the min­i­mum price required to pro­duce their olive oils prof­itably, pro­duc­ers have long asserted that the aver­age prices for the past three years have been far too low.

Data from the International Olive Council show that prices in September fin­ished at €313 per 100 kilo­grams of extra vir­gin olive oil, €298 per 100 kilo­grams of vir­gin olive oil and €295 per 100 kilo­grams of refined olive oil.

Pico Lapuente indi­cated that these prices at ori­gin are prov­ing to be unsus­tain­able. He said the rise in price at ori­gin is reduc­ing the com­pet­i­tive­ness of the Spanish export sec­tor, which is an impor­tant source of rev­enue for pro­duc­ers.

In the 2019/20 crop year, the last one for which a com­plete data set was avail­able, Spain exported almost 1.1 mil­lion tons of olive oil.

See Also: European Olive Oil Exports Expected to Recover as Costs Rise

The mat­ter is not triv­ial because exports rep­re­sent 75 per­cent of every­thing that is pro­duced in Spain,” Pico Lapuente told Agro Popular.

However, there is a lag period between the point at which prices for pro­duc­ers increase and exporters begin to see smaller returns.

Globally, the drop in exports has not been even greater because the first two quar­ters of the cam­paign were very pos­i­tive and pos­si­bly because in this type of oper­a­tion, on many occa­sions, annual con­tracts or fixed-price con­tracts are used per sea­son,” Pico Lapuente said.

But as the new cost of oil has already begun to be reflected, sales to the for­eign mar­ket have begun to suf­fer notably,” he added.

However, the strain caused by high prices on exporters may be alle­vi­ated later in the sea­son. If the pre­dicted bumper har­vests in some parts of the Mediterranean basin come to fruition, pro­duc­tion will once again exceed demand, and prices may come back down.

Away from pro­ducer prices, Pico Lapuente con­cluded that the export sec­tor needs to invest more in pro­mo­tion cam­paigns that stim­u­late the con­sump­tion of olive oils com­pared to other veg­etable oils” to remain com­pet­i­tive in the global mar­ket­place.





Advertisement

Related News

Feedback / Suggestions