Jaen’s Mills Stop as 10,000 March Over Olive Oil Prices
Nine mills in ten stopped work across Jaen on Thursday and about 10,000 people turned out at rallies, in the first organized protest of a season in which olive oil at origin has fallen from 2.60 euros a kilo to 1.80. What the growers want, who they blame, and why a short crop has not saved them.
What happened
COAG Andalucia called the stoppage for Thursday, January 29. By the Tuesday, 70 percent of the province’s mills, cooperative and private, had said they would join. On the day the organization put the figure at 90 percent, with whole districts including Cazorla, Alcaudete, Porcuna and Arjona shutting down.
The main rally was at the La Union cooperative in Ubeda, where more than 5,000 people gathered, with about twenty busloads arriving from around the province and delegations from the rest of Andalusia. Arjona and Porcuna held their own gatherings, roughly 2,000 people at each. The organizers say the next date is February 19, in Jaen itself.
The arithmetic behind the anger is simple enough. In January 2008 olive oil at origin was around 2.60 euros a kilo. This January it has fallen to 1.80. That 80 cents is the difference between a thin year and an unpayable one in a province where the olive is not one crop among many but the entire local economy.
What the growers are asking for
COAG’s list is specific, and it is aimed at Brussels and Madrid rather than at the weather.
- Immediate activation of the private storage mechanism, and an update of the trigger price. The organization says the reference should be about 2.20 euros a kilo rather than the 1.77 euros currently set at Community level.
- Special protection for traditional groves in the less favored areas, which cannot mechanize their way out of a price collapse.
- Support for concentrating supply, so that growers negotiate as blocks rather than one mill at a time.
- A change to the Community rules on blends, banning mixtures of olive oil and seed oil for consumption inside the Union.
- Real powers and resources for the Olive Oil Agency to track the industry’s movements of oil.
Behind all of it sits one claim: that three large firms control something like 80 percent of the trade in Spanish olive oil and use that position to buy below the cost of production. The secretary of organization of COAG Andalucia, Eduardo Lopez, made the point that there is an international shortfall of oil this year and the price is still under the line of profitability, which is not how supply and demand is supposed to behave. The general secretary of COAG in Jaen, Rafael Civantos, put the province’s loss at nearly 400 million euros at current prices.
It has also turned personal. COAG says it received telegrams from SOS Cuetara threatening legal action, and answered in public that the company should work honestly with the sector. Anyone who has watched how Spain’s green gold actually gets sold will recognize the pattern: an enormous number of small producers facing a very small number of buyers.
Why a small crop has not lifted the price
Normally a short harvest rescues the grower. This year it has not, and there are three reasons the trade will admit to privately.
The first is stock. After several large harvests there is oil in tanks, and a buyer with full tanks has no reason to chase the new crop. The second is credit. Mills short of cash have to sell oil the week they press it, which means they sell into whatever price is offered. That is precisely what private storage aid is supposed to prevent, and why growers want it switched on now rather than in spring. The third is the recession, which is pushing shoppers toward cheaper oils and own labels across Europe.
The demand about blends belongs to the same argument. Spanish growers have long resented seeing olive oil mixed into cheaper seed oil and sold as something halfway respectable, and in a bad year that resentment gets organized. If you want the plain distinctions the trade relies on, they are in the three grades of olive oil.
When mills are forced to sell at the press, quality drops before the price does. Oil sold in a hurry is oil that has not been settled, filtered or stored properly, and it reaches the bottler tired. A shopper cannot see that on a label, but it is why oil bought at the bottom of a grower crisis often tastes flatter than the same brand did a year earlier.