Business · Energy & Commodities · 11 hrs ago
Spanish farm groups urge action as olive oil prices fall
Four Spanish farm groups want the government to limit olive oil sales after prices fell sharply.
They are asking the Agriculture Ministry, led by Luis Planas, to use a market mechanism that can remove up to 20% of production.
In the second week of the season, extra-virgin olive oil cost about €3.30 per kilogram, down 22% from the same week last year.
The ministry forecasts a harvest of 1.6 million tonnes, while the farm groups expect available supplies to approach 2.2 million tonnes.
The groups say prices are below farmers’ production costs, but the competition regulator has warned that restricting supply could harm competition.
The ministry expects to decide in November; the mechanism can be used if projected supplies meet a specified threshold, and the season began with nearly 357,000 tonnes carried over.
Spanish farm organizations are urging the Agriculture Ministry to activate a mechanism that can remove some olive oil production from the market as prices fall.
They say prices are below production costs and farmers are being forced to sell at a loss.
The mechanism can remove up to 20% of total production and is intended to support market stability.
The ministry estimates this season’s production at 1.6 million tonnes, while the organizations expect total availability to approach 2.2 million tonnes.
The ministry has said November is a key month for deciding whether to activate the measure.
- Who
- Asaja, COAG, UPA and Cooperativas Agro-alimentarias are calling for action from the Agriculture Ministry and Minister Luis Planas.
- What
- The organizations want the ministry to activate a mechanism that can remove part of the olive oil production from the market.
- When
- They made the call during the olive oil campaign that has just begun. The ministry has said November is key to its decision.
- Where
- Spain.
- Why
- They say olive oil prices at origin have fallen sharply and are below production costs, leaving farmers selling at a loss.
Farm organizations
CNMC
Effect of the measure
Farm organizations
The organizations say activating it would help stabilize prices and support farmers and cooperatives.
CNMC
The CNMC describes the measure as a restriction of supply that may have very negative effects on competition.
The project setting out the olive oil market intervention mechanism was signed.
Extra virgin olive oil was priced at about 3.3 euros per kilogram, down 22% from the same week a year earlier.
The CNMC published a non-binding report warning that the measure could harm competition.
The Agriculture Ministry said this would be a key month for its final decision on activating the measure.
- Organizations calling for action
- Asaja, COAG, UPA and Cooperativas Agro-alimentarias
- Maximum production that can be withdrawn
- 20%
- Ministry production estimate
- 1.6 million tonnes
- Organizations’ availability estimate
- Nearly 2.2 million tonnes
- Extra virgin olive oil price
- About 3.3 euros per kilogram in the second week of October
What people are saying
lack of diligence
the only lifeline for producers and cooperatives to ensure the profitability of their farms
restriction of supply