Movements in Producer Prices of Extra Virgin Olive Oil on the World Market

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Extra virgin olive oil: In recent months, producer prices in Spain have been moving downwards, reaching €1.97/kg in the second week of January. By the last week of April, they were slightly up at €2.02/kg but still 29 pc lower than the same time a year earlier. At first glance, this trend appears to mirror the recovery in the level of Spain’s production. It will be remembered that prices had started to decrease in April 2013 and gathered downward momentum in September 2013, perhaps as a reaction to the announcements of a good harvest in 2013/14. During the period analysed, prices peaked at €3.02/kg at the beginning of March 2013 (see Graph 1) but lately appear to be steadying at around €2/kg.

Italy – Producer prices in Italy started to move upwards in December 2013 and reached a period high of €3.40/kg at the end of April (Graph 1), equal to a rise of 6 pc.

Greece. From mid-December 2013 until late January 2014 producer prices in Greece held steady at €2.46/kg, later reaching €2.56/kg by the end of April, which represents an increase of 4 pc on the same period of the preceding season. In all probability, this level ties in with the lower level of Greek production for 2013/14. It should be noted that in September 2013, prices held at €2.50/kg for three consecutive weeks, probably already reflecting the expected drop in production in 2013/14.

Tunisia. At the end of October 2013, producers were paid €2.53/kg for their extra virgin olive oil. After that, prices started moving downwards until late December 2013, when they levelled off, only to drop further to €2.41/kg by the end of April, recording a decrease of 7 pc versus the same period a season earlier. Producer prices in 2012/13 were influenced by the poor harvest in Spain, which generated higher prices than in 2011/12. This season, the combination of a good harvest in Spain and a poor harvest in Tunisia probably partly explains the current level of prices in Tunisia, which have moved away from Spanish prices since early January 2014.

Refined olive oil: The prices paid to producers for refined olive oil continued downwards in Spain, reaching €1.75/kg by the end of April. This is 31 pc lower than the level the same time a year earlier and appears to be connected with the respective volumes of harvest in 2012/13 and 2013/14. Prices in Italy have behaved similarly but reached €2.83/kg by the third week of January, then dropping to €1.96/kg at the end of April. No data are available on this category for Greece. At the end of April, the price of refined olive oil and extra virgin olive oil in Spain differed by €0.27/kg as the prices of extra virgin grade seem to be levelling off at €2/kg while those of refined product stand at €1.75/kg. In Italy, the difference in price between the two categories is much wider than in Spain, lying at €1.44/kg (Chart 3).

Graph 1 tracks the weekly movements in the prices paid to producers for extra virgin olive oil in the three top EU producing countries plus Tunisia while Graph 3 shows the weekly changes in the producer prices for refined olive oil in the three main EU producers. The monthly price movements for the same two grades of oil are given in Graphs 2 and 4. EVOO prices

movements_prices_evoo prices Source IOC MARKET NEWSLETTER No 82 – April 2014

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