Olive Council's New Agreement Takes Effect

The International Olive Council (IOC) ini­ti­ated its new International Agreement on Olive Oil and Table Olives — the sixth such agree­ment drafted by the orga­ni­za­tion.

Approved by the United Nations at its Conference on Trade and Development in 2015, the agree­ment that took effect January 1 aims to boost the involve­ment of importer coun­tries by mak­ing par­tic­i­pa­tion shares more appeal­ing — a fis­cal incen­tive to join the orga­ni­za­tion in its global efforts.
See Also:International Agreement on Olive Oil and Table Olives, 2015
As a suc­ces­sor to the trade agree­ment made in 2005, three key issues stood as the main objec­tives of the agree­ment: 1) stan­dard­iza­tion and research; 2) olive growth and tech­nol­ogy; and 3) the ​“olive econ­omy.”

With respect to the 2005 agree­ment, the biggest change is the cal­cu­la­tion of par­tic­i­pa­tion shares that includes the vol­ume of imports. Previously, this vari­able was not included as a fac­tor in deter­min­ing share val­ues in par­tic­i­pat­ing coun­tries.

The new for­mula from which the IOC may derive par­tic­i­pa­tion shares is:

q = 1/3 (p1 + p2) + 1/3 (e1 + e2) + 1/3 (i1+i2) — with p1 stand­ing for aver­age olive oil pro­duc­tion over the last six crop years and p2 stand­ing for table olive pro­duc­tion (then con­verted into its olive oil equiv­a­lent).

In the equa­tion, e1 and e2 rep­re­sent cus­toms exports of both com­modi­ties and i1 and i2 rep­re­sent imports of the same.

By adjust­ing the per­cent­age of the share value to reflect imports, the new agree­ment aims to increase the par­tic­i­pa­tion of coun­tries that are not major pro­duc­ers of olives and olive oil.

The min­i­mum num­ber of par­tic­i­pa­tion shares guar­an­teed any par­tic­i­pat­ing coun­try is five, out of a total of one thou­sand, divided among each ter­ri­tory.

The EU is cur­rently the largest share­holder with 717 par­tic­i­pa­tion shares; Tunisia places sec­ond with 67 shares; Turkey rests in third with 66 shares.

Reflective of pro­duc­tion vol­ume, the coun­tries of Morocco, Egypt, Algeria and Argentina have shares in the high teens and above; while Middle Eastern coun­tries like Iran, Iraq and Israel remain at the base five-par­tic­i­pa­tion-share level.

The United States is not a mem­ber of the IOC.

From its found­ing on Valentine’s Day, February 14, 1956, the IOC has taken strides in con­nect­ing inter­na­tional bod­ies in the mar­ket­place, mak­ing it the ​“only inter­gov­ern­men­tal orga­ni­za­tion in the world to bring together olive oil pro­duc­ing and con­sum­ing stake­hold­ers,” as described on their web­site.

The IOC’s December 2016 Market Newsletter detailed the agree­ment made between forty coun­tries includ­ing the EU and the UK.

By offer­ing the new incen­tives to par­tic­i­pate in the col­lab­o­ra­tive struc­ture by cre­at­ing greater ben­e­fits, the IOC leads the charge in estab­lish­ing itself as an author­i­ta­tive and com­mand­ing body of lead­er­ship among olive oil and table olive pro­duc­ing and con­sum­ing coun­tries.

As the global econ­omy waxes and wanes, the IOC has bol­stered its efforts to cre­ate a for­ti­fied union of like-minded gov­ern­ments.

• International Olive Council


• International Agreement on Olive Oils and Table Olives 2015