Spanish Olive Oil Exports to U.S. Surge Ahead of WTO Decision

Summary

Spanish olive oil exports to the United States have increased by 40 per­cent in the first half of 2019 due to low prices in Spain and the antic­i­pa­tion of impend­ing tar­iffs, caus­ing buy­ers to stock up on Spanish oils in the U.S. If the World Trade Organization approves a 100 per­cent tar­iff on European goods, includ­ing olive oil, prices in the U.S. may dou­ble or triple, poten­tially pric­ing many Spanish olive oils out of the mar­ket and leav­ing pro­duc­ers uncer­tain of where else to sell their prod­uct.

Spanish olive oil exports to the United States increased by 40 per­cent in the first half of 2019, accord­ing to data from Spain’s cus­toms agency.

The large increase in exports has been attrib­uted to low prices in Spain and the prospect of impend­ing tar­iffs, which has caused buy­ers to stock up on Spanish oils in the U.S.

“Some com­pa­nies have accel­er­ated pur­chas­ing sched­ules as a tem­po­rary hedge against poten­tial tar­iffs,” Joseph R Profaci, the exec­u­tive direc­tor of the North American Olive Oil Association (NAOOA), told Olive Oil Times.

Since January, Spanish pro­duc­ers have exported about $296 mil­lion of olive oil to the U.S., an increase of $32 mil­lion com­pared with the same period last year. Spurred on by these increased sales and helped by a poor har­vest across the rest of the Mediterranean, some in Spain expect exports to hit a record high this year, exceed­ing 1.1 mil­lion tons for the first time.

Antonio Luque, the pres­i­dent of Spain’s largest olive oil coop­er­a­tive, DCoop, also thinks the spike in demand for Spanish oil in the U.S. is being dri­ven by fears of mas­sive price increases, accord­ing to El Pais. These price hikes will come to fruition if the World Trade Organization approves a 100 per­cent tar­iff placed on hun­dreds of dif­fer­ent goods exported from the European Union to the U.S., includ­ing olive oil and four types of table olives.

The WTO has report­edly made its deci­sion on whether or not it will approve the $15 bil­lion worth of tar­iffs and will announce its deci­sion soon. If the tar­iffs are approved, olive oil prices in the U.S. may dou­ble or even triple, accord­ing to Profaci.

Increases this sub­stan­tial would likely price many Spanish olive oils out of the U.S. mar­ket. This has pro­duc­ers in the province of Córdoba espe­cially con­cerned. In the cur­rent crop year, the sec­ond-largest olive oil-pro­duc­ing province in Spain has exported nearly 71,000 tons of olive oil to the U.S., which rep­re­sents 22 per­cent of the province’s total olive oil exports.

Italy is the only des­ti­na­tion to which Córdoban pro­duc­ers sell more olive oil, with 40 per­cent of exports head­ing to the world’s largest olive oil importer this crop year. However, a por­tion of that olive oil is blended with other oils and then re-exported to the U.S.

The Italian Association of the Olive Oil Industry (Assitol) has already warned that Italian pro­duc­ers could lose $200 mil­lion each year if the tar­iffs are approved. Blended Italian oils would be among those which would cost more in the U.S. and there­fore be exported less, which may fur­ther cut demand for Córdoban oil.

If the tar­iffs are approved, many pro­duc­ers in Córdoba, along with the rest of Spain, are unsure where else they will be able to sell their olive oil. However, until the WTO makes its deci­sion, all these pro­duc­ers can do it wait and see.

• El País


• Diario Córdoba