The WTO has reportedly decided whether it will approve tariffs on European goods headed to the U.S. and is set to make an announcement soon. Until then, importers are accelerating purchasing schedules in order stock up on Spanish oils.
Spanish olive oil exports to the United States increased by 40 percent in the first half of 2019, according to data from Spain’s customs agency.
The large increase in exports has been attributed to low prices in Spain and the prospect of impending tariffs, which has caused buyers to stock up on Spanish oils in the U.S.
Some companies have accelerated purchasing schedules as a temporary hedge against potential tariffs.- Joseph R Profaci, executive director of NAOOA
“Some companies have accelerated purchasing schedules as a temporary hedge against potential tariffs,” Joseph R Profaci, the executive director of the North American Olive Oil Association (NAOOA), told Olive Oil Times.
Since January, Spanish producers have exported about $296 million of olive oil to the U.S., an increase of $32 million compared with the same period last year. Spurred on by these increased sales and helped by a poor harvest across the rest of the Mediterranean, some in Spain expect exports to hit a record high this year, exceeding 1.1 million tons for the first time.
See Also:Olive Oil Trade NewsAntonio Luque, the president of Spain’s largest olive oil cooperative, DCoop, also thinks the spike in demand for Spanish oil in the U.S. is being driven by fears of massive price increases, according to El Pais. These price hikes will come to fruition if the World Trade Organization approves a 100 percent tariff placed on hundreds of different goods exported from the European Union to the U.S., including olive oil and four types of table olives.
The WTO has reportedly made its decision on whether or not it will approve the $15 billion worth of tariffs and will announce its decision soon. If the tariffs are approved, olive oil prices in the U.S. may double or even triple, according to Profaci.
Increases this substantial would likely price many Spanish olive oils out of the U.S. market. This has producers in the province of Córdoba especially concerned. In the current crop year, the second-largest olive oil-producing province in Spain has exported nearly 71,000 tons of olive oil to the U.S., which represents 22 percent of the province’s total olive oil exports.
Italy is the only destination to which Córdoban producers sell more olive oil, with 40 percent of exports heading to the world’s largest olive oil importer this crop year. However, a portion of that olive oil is blended with other oils and then re-exported to the U.S.
The Italian Association of the Olive Oil Industry (Assitol) has already warned that Italian producers could lose $200 million each year if the tariffs are approved. Blended Italian oils would be among those which would cost more in the U.S. and therefore be exported less, which may further cut demand for Córdoban oil.
If the tariffs are approved, many producers in Córdoba, along with the rest of Spain, are unsure where else they will be able to sell their olive oil. However, until the WTO makes its decision, all these producers can do it wait and see.
More articles on: import/export, Spain, tariffs
Aug. 14, 2023
State-of-the-Art Irrigation Management Leads to Rising Yields in California
To endure a changing climate, new approaches for managing and optimizing irrigation are paramount.
Nov. 6, 2023
Making Award-Winning Olive Oil from California’s Centenarian Trees
In the foothills of the Sierra Nevada, Guilio Zavolta and Rachelle Bross seek to promote and protect the state’s historic olive trees.
Feb. 20, 2024
Balearic Islands Tighten Restrictions as Xylella Spreads in Mallorca
The strain of Xylella fastidiosa responsible for Olive Quick Decline Syndrome was identified in other plants in Mallorca.
Jun. 27, 2023
How Awards Helped One Tunisian Producer Thrive in the Lucrative U.S. Market
The NYIOOC award-winning producer behind Massiva combines generations of olive oil production experience with adept marketing.
May. 11, 2023
Kalinjot Monovarietal Places Albanian Olive Oil on World Stage
Andrew Strong hopes the Gold Award at the NYIOOC for an organic endemic monovarietal will catch the world’s attention.
Mar. 6, 2024
US Surpasses Spain as Second-Largest Olive Oil Consumer
Experts predict the U.S. will overtake Italy to become the world’s largest consumer of olive oil.
Apr. 16, 2024
Researchers Investigate Solar Panel and Olive Grove Synergies
Solar panels between rows of high-density olive groves generate electricity with minimal impact on yields.
Oct. 3, 2023
California Olive Farmers Turn to Birds for Natural Pest Control
Olive farmers are boosting bird populations and biodiversity by creating and preserving bird-friendly habitats to help control pests.