Tuesday, April 22, 2008

PoolRed

For those of our readers who might be concerned by the very low price for extra virgin olive oil registered by PoolRed this week - a couple of words to the wise. When, yesterday morning, the spot price printed at under 2.39€/kilo, the accompanying volume was 104 tons. That would mean that slightly more than four tanker truckloads had been reported as sold in the last week. Were the market any slower, it would be stopped. The EVOO prices posted by the Agencia del Aceite de Oliva, those who maintain PoolRed, become extremely unreliable in slow conditions - as any reader who noted the very accompanying small change in virgin and lampante. This is because they are volume-weighted averages of five days of voluntarily reported transactions. One can imagine any of various scenarios that would produce this abberant figure:

1). The sale of 100,000 kilos of borderline acidity EVOO from last year's crop;
2). A typing error, like hitting '3' instead of '4', made when reporting the sale;
3). Actual bad will. Knowing how the price is calculated, in very slow periods any individual dealer is perfectly capable of manipulating the posted price.

There is no more reason to consider this price 'real' than there was a few weeks ago, when EVOO soared 8 cents (to 2.70€) as lower grades were beginning to break support downward. That was the opposite case - low volume allowing the price to be dominated by a sale of 0.1% arbequina. The better strategy for any price-watcher is to make a rough guess as to the normal premium that their particular EVOO carries over virgin and calculate it on the basis of the latter.

Yesterday's screen is posted below.

1 comment:

Anonymous said...

Not easy days to get to know ..Whats the market price like...But If there are no sales,,,.very soon we will see coops dropping prices...