The European Commission announced today that it will provide private storage aid enabling up to 100,000 tons of Spanish virgin olive oil to be stored for six months.

The aid trigger level for virgin olive oil is 1.71 €/kg. When the price paid to producers in Spain fell to an average of 1.691 €/kg for the week ending September 11 it provoked renewed calls for the E.C. aid to be introduced urgently.

EU Agriculture & Rural Development Commissioner Dacian Cioloş said this afternoon that he had decided to allow the aid “in order to help the sector address some of its short-term problems. By providing a six-month storage period I believe that we will not adversely affect the market at the start of the new season.”

“At the same stage, we will have to look at the more medium to long-term structural problems, and I will be coming forward with a concrete action plan on this in the coming weeks.”

The stored volume will not be allowed to come back on the market until after the end of the 2011/2012 harvest, by which time it is hoped that prices will have increased. In coming weeks the E. C.will open a tender process for the storage of the oil.

Spain’s Minister of Environment, Rural and Marine Affairs, Rosa Aguilar, said the introduction of the aid was “an extremely important step for Spain, which produces 80 percent of virgin olive oil in the EU”. It would provide a boost for 500,000 producers and 1,700 mills, she said.

Agrarian organizations FAECA and COAG said the step should have been taken months ago. FAECA said it was nevertheless welcome as it would “help provide some relief for Andalusian producers.”

COAG said the current situation was “unsustainable after three seasons selling below production cost.”

This is a breaking news article. Check back for updates.

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