`Olive Oil Consumption Slumps in Europe as High Prices Persist - Olive Oil Times

Olive Oil Consumption Slumps in Europe as High Prices Persist

By Paolo DeAndreis
Feb. 9, 2023 22:02 UTC

Santiago Miralles, deputy pres­i­dent of the Spanish Federation of Food Banks, recently said ris­ing olive oil prices are trans­form­ing the prod­uct into a lux­ury good.

We bought olive oil for €2.33, but now it is up to €5.00 per liter,” he told local media. It is not a neces­sity any­more; it is a lux­ury.”

Miralles’ words echo those of the coun­try’s olive oil pro­duc­ers. They believe that the pro­duc­t’s high price might be affect­ing over­all demand in Spain.

See Also:Spain’s 2022 Olive Oil Sales only Slightly Lower than Expected

The Spanish Association of Olive Oil Exporters, Industry and Commerce (Asoliva) and the National Association of Industrial Packers and Refiners of Edible Oils (Anierac) noted that the price at ori­gin rose 60 per­cent in the last year. In com­par­i­son, retail prices have risen by 35 per­cent.

The European Commission’s mar­ket obser­va­tory said the price at ori­gin increased slightly less in Italy (51 per­cent) and in Greece (42 per­cent).

Asoliva and Anierac warned that cur­rent olive oil price dynam­ics are cer­tain to affect local and inter­na­tional demand.

On the heels of this warn­ing, Spain’s Ministry of Agriculture, Fisheries and Food said last mon­th’s olive oil sales amounted to 89,000 tons, 37,000 tons of which were sold domes­ti­cally.

According to Agropopular, those vol­umes are well below the 100,000 tons usu­ally sold monthly. Furthermore, Spanish exporters said ship­ments in December had already dropped by 30 per­cent com­pared to the same period of the pre­vi­ous year.

Poolred, an olive oil price data­base run by the Andalusian gov­ern­ment, shows that all grades of olive oil have pro­gres­sively increased their price at ori­gin, reach­ing their peaks around mid-January.

A por­tion of the increases has been asso­ci­ated with the reduced olive oil yields across the west­ern Mediterranean, related uncer­tain­ties and ris­ing costs for pro­duc­ers.

Since mid-January, though, price dynam­ics have begun to change. Extra vir­gin olive oil prices dropped from €5.46 per liter in mid-January to €5.20. Prices for vir­gin olive oils and lam­pante also fell.

Some indus­try observers noted that the slight price drop would not imme­di­ately affect the prod­uct demand, which is expected to remain low as con­sumers strug­gle with chal­leng­ing cir­cum­stances.

Chief among these is infla­tion. Despite recent decreases in annual infla­tion rates across the European Union, but most notably in Spain, higher prices for a range of goods and ser­vices con­tinue to impact con­sumer food pur­chase deci­sions.

Coldiretti, an Italian agri­cul­tural asso­ci­a­tion, has esti­mated that Italian fam­i­lies spent 8 per­cent more on gro­ceries in 2022 than the pre­vi­ous year.

To pre­vent con­sumers from choos­ing cheaper alter­na­tives to olive oil, pro­duc­ers have reduced their mar­gins not to lose mar­ket share, maneu­ver­ing in the nar­row space left by the ris­ing costs of pro­duc­tion inputs, includ­ing elec­tric­ity, fuel, fer­til­izer and pack­ag­ing mate­ri­als.

However, as Miralles pre­vi­ously sug­gested, con­sumer per­cep­tion around olive oil might be chang­ing, which prompted Spanish Minister of Agriculture Luis Planas to ask the entire sec­tor to work together to keep prices afford­able for fam­i­lies last November.

The recent intro­duc­tion of a reduced VAT (value-added tax) for the sec­tor in Spain has been praised by pro­ducer asso­ci­a­tions. However, they said the tax on plas­tic reduced the ben­e­fits reaped from the mea­sure.

Additionally, a slow­down in olive oil con­sump­tion might lead large national and inter­na­tional buy­ers to wait for the mar­ket dynam­ics to set­tle before nego­ti­at­ing new con­tracts, which, in turn, might fur­ther slow down sales and hit pro­duc­ers’ mar­gins.

In Italy, Europe’s sec­ond-largest mar­ket in terms of vol­umes, olive oil prices remain sta­ble, with extra vir­gin olive oil prices not show­ing any signs of falling.

Specialty prod­ucts, includ­ing olive oils with a Protected Designation of Origin, are sell­ing for €8.50 per kilo­gram in Chieti, €12.50 in Imperia, €14.00 in Florence and up to €24.00 in Ravenna.

Whoever knows the sec­tor already knows that we sig­nif­i­cantly reduced our mar­gins last year, but there are fac­tors beyond our con­trol that affect the pro­duc­t’s final price,” said Primitivo Fernández, Anierac’s direc­tor.

Current esti­mates of the International Olive Council (IOC) for the 2022/23 crop year show E.U. olive oil con­sump­tion drop­ping to 1.4 mil­lion tons from 1.55 mil­lion tons in the pre­vi­ous crop year.

Global con­sump­tion is also expected to slow from 3.239 mil­lion tons to 3.055 tons.


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