Spanish Olive Oil Exports to U.S. Surge Ahead of WTO Decision

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.

Container ship leaving the port of Valencia, through which most of the country's olive oil exports depart
Sep. 18, 2019
By Daniel Dawson
Container ship leaving the port of Valencia, through which most of the country's olive oil exports depart

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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 News

Antonio 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.

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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.





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