The price of oil shoots up in the field and the sector leaves the crisis behind

The prices of olive oil since the beginning of the campaign last October have registered an average increase of more than 50% in all its categories, to approach the record figures of 2015. After several campaigns of sunk prices, the sector leaves behind the crisis in which it was immersed in the last four years, mainly supported by a harvest below expectations and an increase in demand.

At the beginning of this campaign last autumn, the prices of extra virgin olive oil stood at 2.1 euros, to reach in the last week of April to exceed 3.3 euros per kilo, and in an ascending line. In virgin oil, prices rose in the same period from 2 euros to 3.2 and lampantes, or oils of poorer quality, from 1.8 to 3.1 euros, compared to average production costs according to data from Agriculture, of 2.77 euros kilo.

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Large distribution is maintaining prices only with slight increases, with which in the media of the sector there is speculation about the possibility of selling at a loss in the battle to gain market share.

The reason for the increase is that, compared to 1.6 million tons of production expectations, the harvest did not reach 1.4 million and the flowering for the next season has not been good. Added to this situation is a declining harvest in Tunisia, which would go from 400,000 to only 120,000 tons, another 250,000 tons in Greece and a similar figure in Italy, where there are always doubts about their real productions.

Faced with this situation, the Ministry of Agriculture left behind the measures included in its roadmap in defense of the olive grove, where it contemplated the withdrawal of the product for other non-food uses, the green harvest, the limitation of the production of olives per hectare or of the yields in the oil mill.

The data for the first quarter of the year indicate an increase in sales abroad of 9%. Unlike the previous year, when part of the export was made with imported oil to avoid the tariffs imposed by the United States, this year their suspension until July means the possibility of exporting more oil of national origin.

Exports

Apart from the more than 300,000 tons of bulk for the Italian market, a return to normality is expected in trade with the United States, with sales of about 150,000 tons to which are added the increases in sales to Latin America, Asia and EU partner countries such as France or the United Kingdom.

In the domestic market, data from the packers’ employers, which brings together 70% of the sector, indicate a stabilization and even a slight 1.4% cut in demand. However, official sales registered by the Agency for Information and Control of the Food Chain indicate an increase of 8%, going from 285.00 to 306,000 tons so far this season. At the beginning of this season, stocks amounted to 491,000 tonnes.

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