Olive oil and the world market Aceite de oliva y la economía
 

OLIVE OIL AND THE ECONOMY

 
   
The origin of the olive oil market is where the virgin olive oils suitable for packaging are sold directly to the packaging industries and the virgin oils that need refining are sent to the refining plants.

 The suppliers of this step in the oil industry are represented by the farmers and millers. According to its legal nature, the mills can be associative, cooperative or agricultural processing companies: Industrial - Corporations and Limited - and Agricultural: actual people who mill their own production.  In Spain there are over 1,500 mills; Half of these are associative (most of which are cooperatives), a firmly established figure in the sector.

The demand at this stage is remarkably concentrated and are the packaging and refining factories that, in turn, are the suppliers of bottled olive oil,  whose customers are the food distribution and export companies.

  

In general terms, the industry is prominently Mediterranean: Spain and Italy produce half of the estimated 2 million tonnes of world-wide production, and the entire European Union produces three-quarters of it; just over 30% of the world production is found in Spain, the leading producer, proprietors of a quarter of the olive grove surface area in the world which is dedeicated, approximately, 90% to the production of olive oil and the other 10% to table olives. 
 

Applications in the home market have evolved in different classifications of olive oil. Speaking of home market we refer mainly to the Virgin Olive Oil, which is the oil obtained solely by mechanical procedures or other physical means, under strict conditions, which do not produce any deterioration of the oil, which has not undergone any treatment except for washing, decantation, centrifugation and filtration.  They are classified as follows:

* Extra.

Absolutely impeccable taste and acidity (expressed as oleic acid), not more than 1 º.

* Virgin

Impeccable taste with an acidity of no more than 2 º. (also called a fine oil in the stages of production and wholesale)

* Regular

Tasty and with an acidity not exceeding 3.3 °.

* Lampante

Bad tasting or whose acidity exceeds 3.3 °.

The olive harvest is highly dependent on weather conditions and, in particular, rainfall. The succession of dry years to wet years causes large swings in the harvest, that means Spain can go from 300,000 tonnes. to 900,000 tonnes. from one year to another, with an average of about 650,000 tonnes. which partly explains the high variability of the price at the source of the olive oil market.

This is generally a market where the trends are clear and relatively persistent over time, whose changes are marked by single operations, and often by the lack of transparency; in the absence of significant transactions, news or events that pose an expected turn, the market tends to follow trends.

 

Generally the prices for packaging virgin olive oil are less affected by the pronounced falls than the prices of refining lampante oil.

On the consumption side, the olive oil market is an industry with great potential for progression. Worldwide, it represents only 4% of total oils and fats: In this context, the industry takes - as its greatest challenge - the conquest of market share of these lower quality substitute products in international markets, primarily potential markets of Japan and USA.

 Source: www.aceitedeoliva.com

 
 
  

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