It is not for the IOC to judge whether these price levels reflect an adequate balance between production costs along the supply chain and the prices that consumers are prepared to pay to continue consuming olive oil but they are a concern that all the players will no doubt take into account for the long-term sustainable equilibrium and development of the sector.
Extra virgin olive oil:
Producer prices in Spain started to rise constantly in the second half of 2014. After breaking the three-euro barrier in the second week of December 2014, they continued upwards to reach €3.28/kg by the end of January 2015. This is the highest level yet in the period under review and is 60 pc higher than a year earlier and 67 pc above the low recorded in May 2014 (€1.96/kg) (Graph 1).
Italy: In recent months, producer prices in Italy have been on a very clear upward trend. In the week from 10 to 16 November 2014, they hit the highest level of both the period under review and the last decade, reaching €6.79/kg. After a small dip in the second last week of December 2014, prices switched back upwards to reach €6.03/kg at the end of January 2015, equating with an increase of 103 pc on a year earlier and 128 pc compared with the low recorded in the second week of December 2013 (€2.64/kg). Graph 2 shows how the monthly prices of extra virgin olive oil have changed in recent crop years.
Greece: After holding steady at €2.51/kg through July and August 2014, producer prices in Greece climbed for several weeks. After declining at the beginning of October they rose to high levels in the next three months, then breaking the three-euro/kg barrier in the third week of January 2015. By the end of the month, they stood at €3.01/kg, showing 21 pc growth on the same period a season earlier.
Tunisia: Towards the end of December 2014, producers were paid €2.73/kg for their extra virgin olive oil. Prices held steady for a few weeks but then started to move upwards to €2.93/kg by the end of January 2015 (+16 pc compared with a year earlier). In the coming months it will be interesting to see how and if prices are affected by the flexibility offered by the EU in the monthly quotas fixed for February and March for Tunisian
Refined olive oil: Producer prices for refined olive oil moved in a similar upward direction in Spain and Italy from June 2014. In Spain they dipped slightly in the last two weeks of September 2014, then rallying to €2.82/kg by the end of January 2015, up by 46 pc on the same period of the preceding crop year. While prices in Italy generally moved in parallel with those in Spain, they did record a peak in the third week of January 2014 (€2.83/kg).
A year later, they were standing at €2.84/kg at the end of January 2015, translating into a period-on-period increase of 36 pc which restores Italian prices to their usual position above Spanish prices. No price data are available for this product category in Greece.
At the end of January 2015, the price of refined olive oil and extra virgin olive oil in Spain differed by €0.46/kg, with €2.82/kg being paid for the first category and €3.28/kg for the second. In Italy, the difference in price between the two categories is considerably wider than in Spain (€3.19/kg – Graph 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.
Source: International Olive Council Newsletter N90 January 2015Olive Oil producers Prices in EU countries plus Tunisia,