On the other hand, the Director of Olive Oil Purchases of Sovena, has ensured that in the current context of a campaign that will hardly exceed 1,300,000 tons, it is easy to think that prices will remain strong, although he has considered that the doubt is whether consumption will react when these prices are reflected in the final consumer.
In addition, Quero has pointed out that it will be necessary to be aware of the influence that rains will have and the evolution of consumption, since “these factors will determine the market’s development in the medium and long term.”
Difficult and uncertain situation
Luis Miguel Algar, head of Deoleo’s Purchasing Department for Raw Material, underlined that although it seems difficult to reach a production of 1,300,000 tons, finally, the amount of oil produced plus the campaign link ensures availability of Raw material for the year. According to Luis Miguel Algar, outlets are being good, as the first months of the campaign were characterized by high purchases that are now being withdrawn. On the other hand, at this price level, he considers that consumption is suffering a standstill, and coverage will last longer. “I understand that part of the production loss has already been discounted at current market prices because this level is not common for the availability of oil in the month we are in. In addition, packers have significantly increased their stocks indicating that they have availability for sales coverage,” he has highlighted.
In his view, the situation is “complicated and uncertain” and in the short and medium term there are no predictions of a substantial fall in prices at origin; “only a slightly aggressive demand (Spain and Italy) and a favorable weather evolution can offer some stability to the current situation, while the opposite will generate tension.” At this price level, Algar believes that the offer will flow in a quiet manner, being quiet in some operators and more intense in others, but “there will be availability, since there are good prices for sale.”
Regarding the second part of the year, the head of Deoleo’s Purchasing Department for Raw Material has stated that the market situation will be relaxed if Spring progresses favorably and a good 2017/18 campaign is confirmed, also in the Mediterranean (Italy, Greece, Tunisia …). “If, on the contrary, all these data dissipate in a different way, we will have more tense situations,” he has stressed.Latest provisional data from the AICA on olive oil price evolution,