`Producer Prices Rally in Spain - Olive Oil Times

Producer Prices Rally in Spain

Aug. 2, 2012
Julie Butler

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The far­m­gate price for olive oil is finally on the up in world pro­duc­tion leader Spain, which some are attribut­ing to expec­ta­tions that after three years of bumper har­vests the next will be a lean one.

The mar­ket knows there will be few olives to pick next sea­son,” Diario Jaen said.

According to the POOLred price infor­ma­tion sys­tem, the index price for olive oil has climbed from €1.87per kg on July 26 to €1.94 today (August 1).

The aver­age price for bulk vir­gin olive oil was €1.67 per kg for the week to July 11 but rose to €1.92 per kg for the week to August 1, though with a lower vol­ume and num­ber of sales.

Drought cast­ing shadow on com­ing har­vest

The Andalusian Federation of Agricultural Cooperative Enterprises (FAECA) says it still expects a 50 per­cent pro­duc­tion drop nation­ally next sea­son while Jaén and Granada will be worst affected, with respec­tive declines of 70 and 65 per­cent.

In a recent state­ment, FAECA said the causes of the dire fore­casts were the com­bi­na­tion of drought and the delayed impact of sev­eral years of abnor­mally high pro­duc­tion — boosted by above-aver­age rain­fall — on the usual pat­tern of one year of higher yield fol­lowed by a lower one.

The lat­est report from Spain’s Olive Oil Agency (AAO), with data to June 30, shows Spain’s 2011/12 olive oil out­put reached a record 1.61 mil­lion tons, up 16 per­cent on last year’s. Exports — pro­vi­sion­ally put at 640,600 tons to the end of June — are also at record level and total olive oil stocks stand at 1.06 mil­lion tons.

Spanish Consuming Less Olive Oil

According to a recent house­hold sur­vey in Spain, olive oil con­sump­tion was down 0.7 per­cent on a year ago for the twelve months to June while there was a slight increase — 0.1 per­cent — for sun­flower oil and growth of 24.6 per­cent for other cat­e­gories of edi­ble oils com­bined.

European Commission Action Plan

In June, European Commissioner for Agriculture Dacian Cioloş said he hoped con­crete changes would be agreed on by the end of July as part of his action plan for the olive oil sec­tor but the mea­sures have yet to be made pub­lic. However, as part of prepa­ra­tion for the plan and for the cur­rent reform of the EC’s Common Agricultural Policy (CAP) sub­sidy sys­tem, var­i­ous EC reports have been pro­duced on the indus­try, among them a mar­ket brief titled Prospects for the Olive Oil Sector in Spain, Italy and Greece — 2012 – 2020.

According to the fore­cast, olive oil pro­duc­tion in Spain could reach 1.68 mil­lion tons by 2020, or up to 1.86 mil­lion tons in the case of extremely high yields. Per capita olive oil con­sump­tion is tipped to stay at about 13 kg/year. Spain’s olive oil stocks could increase to 881,000 tons by the end of 2020/21, it says.

Labeling

Changes to label­ing rules for olive oil were among mea­sures floated by Cioloş and the need for them was also raised in a recent writ­ten ques­tion in the European Parliament by Italian MEP Giancarlo Scottà.

Referring to EC reg­u­la­tion 182/2009’s require­ments regard­ing indi­ca­tion of the ori­gin of olives used to make extra vir­gin and vir­gin olive oil, Scottà said Often this infor­ma­tion can scarcely be read due to its posi­tion or the font used. Considering that most oils on the mar­ket are pro­duced with mix­tures of Italian, EU and non-EU olives, this lack of trans­parency cre­ates unfair com­pe­ti­tion.”

As a result, farm­ers who use only Italian olives have lower earn­ings than those who use mix­tures of EU and non-EU olives with­out declar­ing it on the label. This is also bad for con­sumers, who are not prop­erly informed about the ori­gin of the prod­uct.” A response from the EC is yet to be posted.

Sources:

Diario Jaen (in Spanish)
POOLred
Andalusian Federation of Agricultural Cooperative Enterprises (FAECA) (In Spanish)

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