Extra virgin olive oil, a pact against sales below cost is needed
The collapse of Spanish production had led to price hikes over the past two years, but now the rebound in Madrid is prompting producers and industry to unite to avoid excessive falls in value. The appeal of Assitol
4' min read
4' min read
After two years marked by unprecedented, almost historic events, the olive oil sector in Italy is now at a turning point. In fact, the last two years have witnessed the collapse, for climatic reasons (primarily drought), of Spanish production. The production shortfall in Madrid, the world's leading producer, has triggered a spiral of price increases that has led extra virgin olive oil to steadily occupy the EUR 10 per litre threshold on the shelf. A price level long dreamed of by olive producers and the oil industry without ever having been able to even come close to it in the past has thus become a reality.
The high price increases were not without consequences: there was a drop in consumption of around 16%.
After two years, now, a new abrupt paradigm shift. Spain is back to having a 'normal' olive oil campaign with an estimated production of 1.3 million tonnes (double the average of the last two campaigns). But several other producers in the Mediterranean area are also growing: 250 thousand tonnes are expected in Turkey, 320 thousand in Tunisia, 230 thousand in Greece, 170 thousand in Portugal. Only Italy, thanks to the year of unloading, is expected to produce below average with an expected harvest of just over 200 thousand tonnes. Numbers that would make Italy 'only' the world's fifth largest producer.
But, above all, the strong rebound in production, primarily from Spain, is now raising fears among the production world and the oil industry of a sharp turnaround in prices.
"I remain convinced that the price list debacle will not happen,' explains the president of the olive oil group of Assitol (the association of Italian olive oil industries), Anna Cane. 'However, it is not an outcome that can be left to fate: we must - all - work on it. Everyone, from olive growers to mills and the industry, through to distribution and consumers, must take their share of the responsibility and commit themselves to ensuring that there is no return to extra virgin olive oil at 3-4 euros per litre'.
The president of the Assitol oil group also explains her optimism on the merits. 'In the last two years,' she adds, 'compared to a price growth of 40-50%, we have seen a drop in consumption of 16%. A much less than proportional drop, a sign therefore that consumers have reduced their purchases but have not given up extra virgin. And this is a very important signal, but signals alone are not enough, they must be backed up with targeted initiatives'.
