Exports and Prices Are Looking Up in Greece

Summary

The lim­ited sup­ply of extra vir­gin olive oil in Europe has led to an upward trend in pro­ducer prices in Greece, but the mar­ket is mov­ing slowly due to traders’ reluc­tance to buy based on medium-term needs, with prices remain­ing sta­ble since December. Exports of Greek bot­tled olive oil have sig­nif­i­cantly increased in recent years, with the European Union being the largest mar­ket and the United States being the largest des­ti­na­tion out­side of the EU, dri­ven by efforts of small and medium enter­prises pro­duc­ing high-qual­ity olive oil for for­eign mar­kets.

The lim­ited sup­ply of extra vir­gin olive oil in Europe has cre­ated the con­di­tions for an upward trend in pro­ducer prices in Greece.

However, the Greek mar­ket is mov­ing at a slug­gish pace due to traders’ reluc­tance to buy based on their medium-term needs. So far, olive oil prices remain unchanged since last December.

Due to the COVID-19 pan­demic, the plan­ning hori­zon has been short-term and does not include the sum­mer months that nor­mally accounted for. As a result, buy­ers are think­ing twice about their every move.

Market sources esti­mate that trans­ac­tions will pick up again in the major trad­ing points as soon as the first signs of a mar­ket restart are vis­i­ble, espe­cially in Italy and Central Europe.

Currently, pro­ducer prices show a sta­bi­liza­tion at slightly more than €2.90 per kilo­gram in Laconia, with few trans­ac­tions reach­ing €3.00 per kilo­gram, after the Metamorfosi coop­er­a­tive sold two tanks for €3.10 per kilo­gram about 15 days ago.

Producer prices are also below the €3.00 ceil­ing in Crete, with most quan­ti­ties sold at €2.80 per kilo­gram. Prices in Messinia are at slightly lower lev­els too. However, the region is show­ing some­what higher mobil­ity com­pared to neigh­bor­ing Laconia.

According to mar­ket sources, a nec­es­sary pre-con­di­tion for pro­ducer prices to rise above €3.00 is the restau­rant sec­tor’s open­ing and the prospect of tourism pick­ing up again.

By con­trast, as long as retail remains the pri­mary out­let for olive oil sales, it is dif­fi­cult to chal­lenge the price pol­icy imposed by the large chains look­ing for low-cost olive oil.

Exports of bot­tled olive oil on the rise

Exports of Greek bot­tled olive oil to European Union coun­tries jumped from 7,561 tons in 2002 to 26,872 tons in 2019.

This is an increase of 355 per­cent, accord­ing to data from the European Commission’s Directorate-General for Trade, pub­lished by Sevitel, the asso­ci­a­tion of Greek bot­tlers of olive oil.

A cor­re­spond­ing increase is shown in extra‑E.U. exports of stan­dard­ized Greek olive oil which rose from 7,290 tons in 2002 to 19,807 tons in 2019, rep­re­sent­ing an increase of 272 per­cent.

In total, the exports of stan­dard Greek olive oil have grown from 14,851 tons to 46,679 tons, accord­ing to data from Sevitel.

The largest des­ti­na­tion for the exports of bot­tled Greek olive oil among E.U. coun­tries is Germany, with 10,760 tons. The next biggest des­ti­na­tions are Austria (2,747 tons), Cyprus (1,932 tons), the United Kingdom (1,890 tons), France (1,670 tons), Belgium (1,569 tons) and Sweden (1,222 tons).

Outside of the European Union, the largest mar­ket for Greek olive oil is the United States, with exports reach­ing 9,644 tons in 2019.

This increase in bot­tled olive oil exports can be attrib­uted to efforts made in the last decade by many small and medium enter­prises that pro­duce high-qual­ity olive oil mainly for for­eign mar­kets.

The increased share of these pre­dom­i­nantly extro­verted busi­nesses has also changed the domes­tic mar­ket struc­ture, which was dom­i­nated for decades by a hand­ful of large olive oil bot­tlers and traders that are now incor­po­rated in multi­na­tion­als’ port­fo­lios.