The rise in olive oil prices in the last year has plunged its consumption in Spain by 30% and exports by volume by 40%. “If demand had not decreased and it had been consumed at the usual rate, by the middle of the year there would have been no oil left in the stores,” reflects Rafael Sánchez de Puerta, general director of DCoop, a second-grade cooperative and the largest producer in Europe that It also markets under its brand.
The price has thus regulated demand, both internal and external, and scenes of shortages have been avoided. But now Spain, as the world’s leading supplier – half of the world’s olive oil is produced in the country and mainly in Andalusia – has the challenge of recovering the market share lost in this spiral of prices and lack of supply. Rafael Pico, general director of the Spanish Association of Olive Oil Industry and Export Trade (Asoliva), highlights that foreign sales have decreased more than world consumption, 40% compared to 18%. “Someone has gained quota in this period,” he adds.
Exports have two components, the bulk market and the brand market. The first, Pico points out, is moved by price. The higher the production cost, the lower the margin and the lower the market share. Now, it is easy to recover once prices normalize. In the brand market, however, the dynamics are different. It is more resistant, but if you lose quota, it is difficult to recover it. “There Spain will have to make an effort,” he considers.
Everything will depend, in any case, on the evolution of prices. Tomás García Azcárate, researcher at the CSIC and expert in agrarian policy, considers that the rationing of demand has already been done and with olive production for this campaign similar to the previous one, there should be no new increases in prices like those suffered in recent months. . “We have reached a plateau moment,” he says. No significant declines are expected either.
The bottlers and large retailers, pointed out by consumer associations, also defend that with prices at origin that have reached eight euros – the average price has been six euros per kilo – they cannot reduce prices further. “85% of the price of a bottle is the oil itself; to which we must add plastic, logistics, distribution and taxes,” comments Primitivo Fernández, president of Anierac, the association of industrial packaging and refiners of edible oils. Regarding accusations of speculation, Felipe Medina, technical general secretary of Asedas, the entity that brings together distribution companies such as Mercadona, Lidl, Dia, Aldi or Consum, denies such a possibility due to the very nature of the product. “There is hardly any storage capacity for olive oil because there is a large turnover on the distribution platforms. Furthermore, it is a volume product, not a margin product; our margins range between 1% and 3%,” he maintains.
But not all links in the food chain want a significant drop in the price of olive oil. “We have become accustomed to having excellent food for very little price and this is not sustainable; With the three euros per kilo that were paid two years ago, it is impossible to cover costs,” reflects Jordi Pascual, oil producer in the Catalan region of Baix Penedès and member of Unió de Pagesos. In this area they have also suffered the effects of the drought the most. With a plot of 40 hectares, last season Pascual produced 25,000 liters of oil and this year he expects a quarter of that.
