27 May

European Union set to support olive oil sector with storage aid

By Jeremy Smith & Anthony Barker,

European Union regulators suggested granting olive oil producers subsidies for private storage from as early as June as a way to prevent more price falls, the European Commission said on Monday.

The Commission’s proposal, to be discussed soon by national experts from the EU’s 27 countries, would allow subsidised storage of virgin and virgin olive oils for 180 days, up to a maximum quantity of 110,000 tons if the experts agree.

Subsidised storage is a preferred EU way of giving income to farmers when internal prices for a commodity fall below a pre-determined trigger, so they can avoid selling at a loss.

The commodity is “bought in” to stores, either private or public, until prices rise again to a level attractive enough for it to be sold back into the EU internal market.

“Olive oil prices have been consistently decreasing in the EU since the start of the 2008/09 marketing year,” the Commission said in a statement.

“Given the present market conditions, a maximum quantity of 110,000 tonnes seems adequate to help rebalance the olive oil market,” it said.

The EU is the world’s leading producer of olive oil, with around 80 percent of output and 70 percent of consumption. Spain is the top producer worldwide, followed by Italy and Greece.

On several major representative markets in recent weeks, olive oil prices, specifically for extra virgin and virgin qualities, have remained under the EU trigger levels used for private storage: 1,779 euros ($2,490) a tonne for extra virgin olive oil and 1,710 euros for virgin olive oil.

The storage subsidies will be decided by tender, where producers and traders will propose storing quantities of either oil quality for 180 days and request a certain amount of financial compensation, per tonne and per day.

The best offers will be accepted and payments made at the end of the storage period.

“The tender will be opened as soon as possible during the month of June and the periods of subsidised private storage of olive oil could start during the months of June and July,” the Commission statement said.

Extra virgin is the highest quality olive oil, cold pressed and with a very low acid content, derived from the first pressing of the olives. Virgin olive oils have slightly higher amounts of acid. Neither grade may contain refined oil.

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One Response to “European Union set to support olive oil sector with storage aid”

  1. Sue Catering Says:

    I have recently found this site and I have found it really informative and enjoyable.

    This must be fantastic news for the olive manufacturers especially in these financial times and everyone needs a helping hand.

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