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.
It is not the place of 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 (see comments in section I.1 regarding the December 2014 import figures for several countries).
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 on their upward trajectory to peak at €3.29/kg in the second week of February 2015. They hovered around this level in the last two weeks of February, then closing at €3.22/kg at 60 pc higher than a year earlier and 65 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 and were lying at €6.03/kg at the end of February 2015, equating with an increase of 93 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: Lately, prices have remained high and they broke the three-euro/kg barrier in the third week of January 2015; however, in the first three weeks of February they slipped to €2.96/kg and were standing at €2.94/kg by the end of the month (+18 pc 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 and peaked at €3.10/kg by the end of February (+23 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 tax-exempted olive oil exports to the EU.
Refined olive oil: After moving in a similar upward direction, producer prices for refined olive oil in Spain and Italy seem to have been drifting apart in recent weeks. In Spain they have dipped slightly to €2.82/kg at the end of February 2015, up by 50 pc on the same period of the preceding crop year. In contrast, in Italy prices have continued moving up and peaked at €2.97/kg at the end of February 2015, translating into a period-on-period increase of 45 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 February 2015, the price of refined olive oil and extra virgin olive oil in Spain differed by €0.41/kg, with €2.82/kg being paid for the first category and €3.23/kg for the second. In Italy, the difference in price between the two categories is quite a lot wider than in Spain (€3.06/kg – Graph 3).