`Spain’s Olive Oil Farmers Call for Probe Into Price Manipulation - Olive Oil Times

Spain’s Olive Oil Farmers Call for Probe Into Price Manipulation

May. 2, 2013
Julie Butler

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COAG Jaén General Secretary Juan Luis Ávila

Alleged price manip­u­la­tion by olive oil dis­trib­u­tors should be probed by Spain’s com­pe­ti­tion watch­dog, one of the country’s main farm unions says.

COAG said its lawyers were prepar­ing data to present to the National Competition Commission (CNC) next week to back the call for an inquiry.

COAG-Jaén General Secretary Juan Luis Ávila Castro told Olive Oil Times the fact that ex-mill prices were falling amid Spain’s worst har­vest in 20 years and very low stocks, was telling.

The cur­rent sit­u­a­tion doesn’t reflect free oper­a­tion of the law of sup­ply and demand, it arouses sus­pi­cion that the few, big com­pa­nies dom­i­nat­ing dis­tri­b­u­tion may be jointly agree­ing not to buy at cer­tain times so as to push down the whole­sale price — and that’s ille­gal,” he claimed.

As they expect the next har­vest to be a plen­ti­ful one — some­thing we doubt due to the unsea­son­able snow­fall of late — and they know farm­ers are at their limit, we think they’ll try to hold off buy­ing again here until later this month or June, by when the coop­er­a­tives will be ready to prac­ti­cally give away their oil.”

The sup­ply of cheaper olive oil from Morocco, Algeria and Greece was now dry­ing up, Ávila said.

What we can do is offer clear data to the CNC, whose role it is to inves­ti­gate whether there may be any strat­egy shared by com­pa­nies to act counter to the law of sup­ply and demand,” he said.

According to Spain’s POOLred price obser­va­tory, the aver­age ex-mill price for olive oil in Spain for the last week of April was €2.69 a kilo, down from €2.83 in the last week of March and €2.86 at the end of January but still well above €1.67 early last July when prices started to recover in Spain after sev­eral years at rock bot­tom.

Farmers strug­gling

Ávila said that after the pre­vi­ous three sea­sons with far­m­gate prices below the cost of pro­duc­tion, farm­ers had no sav­ings left and were now pay­ing more for fer­til­izer, fuel and elec­tric­ity.

The price of olive oil farms has halved and there are lots on the mar­ket — many peo­ple are in finan­cial ruin,” he said.

Also, many farm­ers had stopped pay­ing their annual con­tri­bu­tions aver­ag­ing about €600/ha for com­mu­nal irri­ga­tion schemes. Which pre­sum­ably means their water will be cut off and they’ll end up in a very dif­fi­cult sit­u­a­tion given their trees are used to irri­ga­tion,” he said.


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