W2: Weekly Olive & Olive Oil Update
Olive
Europe
EU-US Battle Over Spanish Olive Tariffs at Standstill
While EU legislators and Spanish producers are requesting further EU support with legal fees and losses, the European Commission will continue to abide by the divisive US tariffs on Spanish black olives. On Monday, January 9, MEPs in the agriculture committee of the European Parliament (AGRI) spoke with the EU executive and business leaders about the US tariffs that are still being applied to ripe olives coming from Spain. With up to 35% of the American export market share, the US is the main destination for Spanish olive exports. However, Washington put duties on imports of the olives in 2018, arguing that an excessive quantity of EU subsidies – the Common Agricultural Policy (CAP) – given to Spanish olive producers were affecting their US counterparts.
Spain
In Spain, the Olive Grove Receives Almost USD 24.78M in Compensation During 2022
Compensation from Agroseguro to insured olive growers for claims that occurred in the olive grove in 2022 grew by 38% YoY, reaching USD 24.78M, compared to USD 17.96M in 2021. This is because 2022 has been marked by extended periods of high temperatures (heat waves) coupled with a lack of rainfall, causing olive production to collapse in the 2022 season.
Due to a complaint from the California-based producing industry, the United States imposed 35% tariffs on the importation of black olives from Spain in August 2018. These complaints claimed that the Spanish black olive industry was selling its products below market price and that the CAP aid it had received, such as income assistance and support for young farmers, represented dumping on the American market. The US market is the largest in the world with the most growth potential. However, five years ago, the volume of Spanish black olive exports fell by 68%, making the Spanish sector less competitive.
Additionally, because only Spain is affected by these tariffs, Spanish producers have seen a decline in profitability when compared to those of the other EU-producing nations and, at the same time, concerning producers from third countries, mainly from North Africa. The WTO ruled the imposed tariffs to be illegal, and Spanish businesses, including cooperatives, have paid more than USD 9.20M in legal costs in American courts without receiving compensation.
Spanish Black Olive Exports to the US Have Fallen by 68% In the Last Five Years
The WTO ruled the imposed tariffs to be illegal, and Spanish businesses, including cooperatives, have paid more than USD 9.20M in legal costs in American courts without receiving compensation. The US market is the largest international market with the greatest growth potential for Spanish black olives, but over the past five years, Spanish exports of this product have decreased by 68% in volume, reducing the competitiveness of the Spanish sector. Following a complaint from the California producing industry, the United States imposed 35% tariffs on the import of black olives from Spain in August 2018.
Olive Oil
Spain
Olive Oil Sales in Spain Fell by 16% Since October
Since the marketing campaign began in October 2022, 322,720MT of olive oil have been sold, which is 16% lower than during the 2021/22 campaign, when 385,000MT were sold. According to the head of the UPA Olive and Oil Sector, the figure is predicted, as Spain had a difficult campaign marked by low production, in short, the worst campaign of the century due to drought. As a result, olive trees that suffered damage are now being felt in oil production. Additionally, this slight reduction in sales also has nothing to do with anything the price of oil.
The Bump in Olive Oil Outlets in December Is Confirmed
According to estimates made by Spain's entire olive oil industry a few weeks ago, oil shipments in the final month of 2022 excluding imports, which may have totaled 18,000–20,000MT were only 57,329MT. Despite being expected, this fact is still concerning given the limited supply of olive oil during this campaign. Aside from the fact that there were fewer days available to gather the olives this month due to the significant rains that fell, it is also clear that the production in the month of December was also very low, coming in at only 232,391MT. This is especially true given that the drought had an adverse effect on both the trees and the fruit.
Olive Oil Prices in Spain Have Reached Record Levels
Olive oil prices in Spain continue to rise, continuing the trend that formed last October. Growth has accelerated over the last several weeks, and quotes may soon reach record highs. Prices for extra virgin olive oil increased from USD 5360.97/MT to USD 5790.84/MT between November 28 and December 19. The major market for olive oil in the nation, Jaen, according to the Association of Young Farmers of Jaen, stated that first-press olive oil prices there, where they are produced, reached USD 5815.75/MT between December 12 and December 19. Additionally, prices for Lampante olive oil dramatically increased and for the first time ever topped USD 5414.02/MT. Prices have sharply increased as a result of a substantial decline in the overall volume of olive oil production.
The New Tax on Plastic and the Drop in Production Annul the VAT Reduction on Olive Oil
Droughts, heat waves and rising production costs contributed to a 40% increase in the price of olive oil by the end of 2022. For this reason, the Government promoted a reduction in VAT from 10% to 5%. The issue is that the new plastics tax will be implemented in 2023, which would cost the Spanish agri-food sector an estimated USD 746.54M. This will be reflected in the price, and the other tax will cancel out this tax savings for the consumer. Even though demand has decreased 30% in the past year due to a lack of supply, prices have continued to rise.
Greece
Persistent Warm Weather Causes Headaches for Olive Oil Producers in Greece
Greece's producers are still having issues despite a bountiful harvest season, with the total yield of olive oil predicted to exceed 300,000MT. Greek extra virgin olive oil produced recently in some regions of the country may not be of the highest quality due to the unusually warm weather that has been prominent there, with daytime highs hovering around 20°C. However, the temperature has not yet dropped, and the current high humidity encourages the growth of the fruit fly and gloeosporium. All of these have an effect on the quality of the olive oils, whose acidity levels have recently ranged from 0.8 to 1.
Tunisia
Tunisia Increases Its Exports by 42.1% Of Olive Oil in the First Month of the Campaign
In December 2022, The National Observatory for Agriculture (ONAGRI), which is part of the Ministry of Agriculture, Hydraulic Resources, and Fisheries of the Government of Tunisia, released the numbers for olive oil exports made during the first month of the 2022/2023 campaign. In comparison to the same month in the 2021/22 season, foreign sales increased by 42.1% in volume and 100.8% in value, reaching 17,200MT with a value of USD 78.24M. Since the start of the 2022/23 campaign, an increased trend in the sale price of olive oil has been seen in the Gremda market, the benchmark market in Tunisia.
