Rising Olive Oil Imports Contribute to Spain’s Trade Deficit with Argentina

Summary

Spain’s agri­cul­tural trade deficit with Argentina decreased in 2023 due to decreased crus­tacean and soy­bean meal imports, despite a sig­nif­i­cant increase in olive oil imports. Argentina expe­ri­enced a bumper olive oil har­vest in 2023, posi­tion­ing itself as a major exporter, with Spain being its largest mar­ket.

Spain’s agri­cul­tural trade deficit with Argentina decreased slightly in 2023 despite a 229 per­cent increase in olive oil imports.

According to data from the Spanish Ministry of Agriculture, Fisheries and Food, Spain’s trade deficit with Argentina decreased from €1.68 bil­lion in 2022 to €1.13 bil­lion in 2023.

The slight improve­ment was pri­mar­ily the result of decreased pur­chases of crus­taceans and soy­bean meal from Argentina, the two largest agri­cul­tural imports by value.

However, olive oil, Spain’s sev­enth-largest agri­cul­tural import from Argentina, expe­ri­enced a sig­nif­i­cant increase, ris­ing from €11.5 mil­lion in 2022 to €37.6 mil­lion.

Rising imports were fueled by his­tor­i­cally high prices and Spain’s abysmal 2022/23 crop year, in which pro­duc­tion reached 660,000 tons, the low­est yield in more than a decade.

This was com­pounded by poor har­vests across the Mediterranean basin and a bulk export pro­hi­bi­tion in Turkey, one of the few coun­tries where pro­duc­tion exceeded expec­ta­tions.

Conversely, Argentina enjoyed a bumper har­vest of 35,000 tons in 2023, giv­ing the world’s largest pro­ducer out­side of the Mediterranean basin an increased capac­ity to export olive oil.

According to Rural Rosario, an agri­cul­tural asso­ci­a­tion in cen­tral Argentina, vir­gin and extra vir­gin olive oil exports increased by 137 per­cent in the first ten months of 2023, reach­ing a record-high 30,567 tons, com­pared with the same period in 2022.

“With the dra­matic drop in European pro­duc­tion in gen­eral and Spanish pro­duc­tion in par­tic­u­lar, Argentina, despite hav­ing a small exportable sup­ply, posi­tioned itself in the first half of 2023 as the sixth world exporter of olive oil,” the asso­ci­a­tion wrote.

Rural Rosario said Spain was the largest mar­ket for Argentine olive oil exporters in 2023, rep­re­sent­ing 34 per­cent of exports by value and 33 per­cent by vol­ume. The United States and Brazil were the other lead­ing export des­ti­na­tions.

“There is cer­tainly a lot of demand for Argentine oils, which pro­vide fresh­ness and high qual­ity, in mar­kets with low har­vests… and with a decrease in olive oil stocks,” Guillermo Kemp, the exec­u­tive direc­tor of Solfrut, a large Argentine pro­ducer and exporter, told Olive Oil Times in a 2023 inter­view.

Most Argentine olive oil exports to Spain are in bulk and usu­ally des­tined for major bot­tlers, includ­ing Deoleo. The oil is then sold domes­ti­cally or re-exported.

According to data from the Spanish Ministry of Industry, Trade and Tourism, Spain exported 12.74 tons of olive oil to Argentina in 2023, val­ued at €77,390.

While the move­ment of the over­all agri­cul­tural trade deficit in 2024 remains to be seen, Spain’s olive oil imports from Argentina are unlikely to rise again.

Official data will not be pub­lished until later in the year, but pro­duc­ers across Argentina antic­i­pate a pro­duc­tion decrease in 2024.

Meanwhile, data from Spain’s Food Information and Control Agency show that olive oil pro­duc­tion reached 851,014 tons in the 2023/24 crop year, sig­nif­i­cantly higher than ini­tial esti­mates of around 700,000 tons.

As a result, offi­cials said Spain has 492,290 tons of olive oil stocks. Combined with imports, they believe this will be enough to meet local demand and exports until the start of the first olive oil from the 2024/25 har­vest is ready to sell in November.

• Spanish Ministry of Agriculture, Fisheries and Food
• Agropopular
• Rural Rosario