Teresa Pérez: “We paid for oil at a price that was not at their level, now we have gone to the opposite pole”

2023-10-08 15:11:25

October begins with the price at origin of extra virgin olive oil above 8 euros. Teresa Perez, manager of the Interprofessional Organization of Spanish Olive Oil, is clear about the reasons, the derivatives and in which scenario he could begin to mitigate the problem. This association represents oil producers, cooperatives, bottlers and exporters.

Why has the price of olive oil risen so much?

Because demand has remained strong all year, but availability has been quite tight. Last season it was already 55% lower than the previous one. The link stock, what you store at the beginning to cover the harvest months, is 1,000 tons lower than last year. According to data from the European Commission, world oil production has been 2.5 million tons, while consumption was 3.3 million tons. There is a very large imbalance between supply and demand.

There is the impression that there is also a point of speculation. Facua spoke this week of price differences of up to 56% for the same bottle depending on the supermarket.

Each distribution chain has its price level, but that happens with oil, yogurt and deodorant. It is the consumer who sees which chain they want to go to for supplies. The system we have is one of the most transparent: monthly, the administration controls oil stock and movement data. There has not been an increase because bottlers or industries are withholding oil to increase the price, it is not something that is being forced, it is something that is occurring naturally.

As soon as we have new availability entries, we would have to stop the price escalation

Teresa Pérez – manager of the Olive Oil Interprofessional

Several economists assured that the solution is to put more oil on the market. Is there one?

Now more oil is going to be put on the market. As soon as new production begins we will have new availability entries and that would have to stop the price escalation and could even cushion it.

But, if the gate of retained oil were opened, would the price go down?

It’s not retained, it’s still coming out. According to the figures we have, in June, in Spain, 28,000 tons left; in July, 36,000; in August, 32,000… One of the keys to why the price continues to rise is precisely because the oil has continued to hit the market. If we had stopped pumping, the price would not have risen any more, it would have stagnated or fallen, because demand would have decreased.

What can we expect from now on?

What can be expected is that with the new production, the price will stabilize or, depending on the available volume, the tension may even be relieved a little. But all this is going to be very marked by global availability.

We play with the advantage of Spain’s attachment to olive oil.

Olive oil is irreplaceable, the product you can exchange it for will not offer you the same thing at all. There are those who say that oil is a luxury product, no, olive oils are a luxury product. We come from two campaigns in which we had prices at origin of 2 and a half euros, in some areas they did not even cover production costs. In Spain we have had the luck or misfortune of paying for this luxury product at a price that was not up to its level of quality and properties. Now we have gone to the opposite pole.

Have you detected that people are switching to another product?

The data reveal that no, what is being done is adjusting the volume of consumption. Our studies tell us that consumers are trying to buy smaller formats, buy more times so that the average ticket does not rise so much…

If we encounter a brake on foreign trade, perhaps the price will begin to fall

Teresa Pérez – manager of the Olive Oil Interprofessional

How is the next campaign planned?

The forecast is that availabilities will be more or less in line with those of last year. If the stock is somewhat larger, the tension would be relieved a little; If they are smaller, the rope could be tightened a little more. We have marketing levels that are around 1 million tons, end-of-season link stocks will be around 300,000 tons, and there was talk of a production estimate of 80,000 tons. Imports will have to be added to that, if necessary, but ‘a priori’ there is no such danger.

Is there no scenario in which a progressive drop in prices is seen?

If consumption suddenly fell. There has been a lot of talk that olive oil from Spain is sold outside the country cheaper than here, that is because stockpiles are made abroad, but this year, importers and distributors from other countries will find that their containers cost two or three times as much. further. We will have to see if their consumers are willing to accept that price increase. We know right now the price level we are at in Spain and the market outlets we are having, but, outside, everything is unknown. We may encounter a brake in trading, and if this occurs, logically there will be no exit, and then perhaps the price stagnates and begins to fall.