`Andalusian Olive Oil Producers Facing Fourth Straight Year of Losses - Olive Oil Times
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Andalusian Olive Oil Producers Facing Fourth Straight Year of Losses

By Julie Butler
Aug. 11, 2011 11:24 UTC

Andalusia’s olive oil pro­duc­ers are fac­ing their fourth con­sec­u­tive year in the red hav­ing already accu­mu­lated a loss of 600 mil­lion euros ($851 mil­lion) with three-quar­ters of their oil already sold and just two months until the sea­son closes at the end of September.

Spanish agrar­ian orga­ni­za­tion COAG, the source of the dire esti­mate, said the total could reach 800 mil­lion euros for 2010-11, which would mean the accrued loss after ruinous prices for the last four years totaled 2.5 bil­lion euros ($3.5 bil­lion).

Since the start of the sea­son last October 1, pro­duc­ers in Andalusia – Spain’s main olive oil region – have sold nearly 847,000 tons but the amount of stored oil is up a quar­ter on the aver­age for the last four sea­sons.

On the pos­i­tive side, COAG says that exports have grown 10 per­cent com­pared with the last sea­son and are up 24 per­cent on the aver­age for the four pre­vi­ous years, and inter­nal demand is up 2 per cent and 1 per cent respec­tively.

But that was­n’t enough to turn for­tunes in the sec­tor because the prices paid to pro­duc­ers remain below cost. The aver­age price for extra vir­gin olive oil was about 2.00 €/kg at the start of the sea­son but has since slumped to 1.82 €/kg,

“All this shows, yet another time, that the olive oil mar­ket is sub­ject to pres­sure from indus­try and from the big (super­mar­ket) chains that con­trol the major­ity of the sales trans­ac­tions and dis­rupt the law of sup­ply and demand,” COAG said in a recent state­ment.

Rafael Civantos, a COAG olive oil spokesman, told El País that bad prac­tices by the dom­i­nant indus­try mem­bers included using olive oil as a loss leader, bypass­ing qual­ity con­trol reg­u­la­tions and con­fus­ing con­sumers through mis­lead­ing prod­uct label­ing.

COAG said the sit­u­a­tion high­lighted the urgent need for pri­vate stor­age aid pay­ments from the European Commission until prices rise. But given many Spaniards take their annual vaca­tion this month – which means reduced activ­ity in the pri­vate and pub­lic sec­tors – and the repeated rejec­tions by the E.C., the mea­sure is unlikely to be intro­duced before the end of September.

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Meanwhile, El Condado Ahora reported that police in Valencia last month detained a local man they say was the logis­tics mas­ter­mind for a crim­i­nal group that stole large amounts of olive oil from around Spain in order to ship it to Italy.

The Guardia Civil police arrested ​“R.R.N.”, aged 50, as part of Operation Olivera, which was set up after the theft of 45,000 kg of olive oil in Bullas, in Murcia, on June 19 last year. The police alleged that his role was to sup­ply the group with infor­ma­tion about quan­ti­ties and loca­tions of stored olive oil and to facil­i­tate the exit of the stolen olive oil in trucks. The oil was taken to the port of Valencia for trans­port to Italy.

Last October, ten Italians and one Spaniard were also arrested as part of the oper­a­tion.

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