Olive Oil Producers in Spain Call for Self-Regulation

Producers want to work with the entire sector to regulate the supply of olive oil on the market in order to minimize price fluctuations.

Feb. 5, 2018
By Daniel Dawson

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Spanish olive oil pro­duc­ers are call­ing on local and national author­i­ties to allow the sec­tor to self-regulate. 

The move would allow pro­duc­ers to sell their oil at spe­cific moments in order to ensure the sta­bil­ity of the olive oil sup­ply and prices on the market.

Self-reg­u­la­tion is a fun­da­men­tal issue for the future of this sec­tor.- Juan Luis Ávila, COAG

Self-reg­u­la­tion is a fun­da­men­tal issue for the future of this sec­tor,” said Juan Luis Ávila, the pres­i­dent of the Union of Farmers and Ranchers in Andalucía (COAG). The best way to carry it out is through an exten­sion of the norm, which is manda­tory for everyone.” 

The inter­pro­fes­sional norm is a set of reg­u­la­tions drafted and agreed to by olive farm­ers; indus­trial millers; olive oil pro­duc­ers, pack­ers and whole­salers; and cooperatives. 

Cristóbal Cano, the sec­re­tary gen­eral of the Union for Small Farmers (UPA) in Jaén, said that the exten­sion of the norm would need the sup­port of all the afore­men­tioned groups in order to come into force. He believes that the olive sec­tor is mature enough to self-reg­u­late properly. 

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The European Union has pre­vi­ously opposed unions, such as COAG and UPA, from self-reg­u­lat­ing because it could neg­a­tively influ­ence sup­ply and demand for oil. 

However, the European Commission recently released a state­ment which said that the EU would be will­ing to allow some self-reg­u­la­tion in this case, in order to pro­tect olive oil pro­duc­ers from swings in the market. 

According to data from the Spanish government’s Food Information and Control Agency (AICA), olive har­vests for the sec­ond half of 2017 were 50 per­cent lower than expected. 

The fig­ures are espe­cially alarm­ing in Jaén… where there are coop­er­a­tives and munic­i­pal­i­ties where they are col­lect­ing 40 to 50 per­cent less than last year,” said Cristóbal Gallego Martínez, the pres­i­dent of the Council of Olive Oil Cooperatives of Andalucía. 

Cano believes self-reg­u­la­tion is nec­es­sary dur­ing these dif­fi­cult times to help small farm­ers survive. 

The estab­lish­ment of a sys­tem of reg­u­la­tion of sup­ply has always been pro­posed as a mech­a­nism to avoid the saw teeth that char­ac­ter­ize the olive oil mar­ket,” he said. 

All the links of the sup­ply chain con­sider that a cer­tain sta­bil­ity in prices would be fun­da­men­tal to offer to the con­sumer a high-qual­ity prod­uct, with accept­able prices, and at the same time, the olive pro­duc­ers would obtain a price that is above of its pro­duc­ing costs, that assures the future of its exports.” 

The pro­duc­tion of olive oil suf­fers when large swings occur dur­ing the grow­ing cam­paign. If pro­duc­ers sat­u­rate the mar­ket with too much oil before it can all be sold then the prices decrease. These pro­duc­ers are then left with a sur­plus of oil being sold for less than the mar­ket value. 

However, if the mar­ket swings in the other direc­tion and prices for oil increase, but pro­duc­tion has lagged behind then some pro­duc­ers may reach the end of the grow­ing sea­son strug­gling to pro­duce enough. 

The idea would be to reg­u­late this sit­u­a­tion by with­draw­ing sur­plus olive oil from the mar­ket at a cer­tain moment, and using that sur­plus to replen­ish the mar­ket sup­ply when it was nec­es­sary,” Cano said.

He believes that domes­tic olive oil con­sumers would not be harmed by self-reg­u­la­tion and may actu­ally ben­e­fit from it, a view directly oppo­site to that of the EU. 

The the­o­ret­i­cal ana­lyzes that have been car­ried out to date show pos­i­tive aspects for both pro­duc­ers and con­sumers,” Cano said. 

We are aware that sig­nif­i­cant increases in the retail price may slow down con­sump­tion. Because of this, a self-reg­u­la­tion sys­tem would allow the sec­tor to limit the large fluc­tu­a­tions in prices, and there­fore main­tain more sta­ble con­sump­tion levels.”





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