The IOOC Is Wrong
The principal webpage of the olive oil futures market, the MFAO, runs a news feed from Oleo Digital. Among the items currently displayed are the latest IOOC production-consumption estimates for 2009.
The Council notes that the surface dedicated, worldwide, to the cultivation of olives continues to increase - primarily in South Africa, Australia and South America. Currently, the are 10.5 million hectares dedicated to this crop. The article goes on state that production this year will reach some 2,866,500 metric tons, 9 percent higher than last year.
As for consumption, the IOOC seems to not understand at all the economic environment in which we currently find ourselves. Stating that there is no lack of demand for olive oil among the world's consumers, they go on to say that there will be a very slight production shortfall this year. A production shortfall! This outlook, if anyone had failed to notice, is not confirmed by the 30% drop in the price of olive oil in the last year. As one friend, an exporter of large quantities of Spanish pomace oil, wrote us about the United States:
Business in the U.S is going down and seed oils so cheap.... a disaster almost.
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Categories:
Demand,
Export Business,
IOOC,
Producer Prices,
U.S.A.
9 comments:
are you saying the emperor has no clothes
are you saying the people charged with tracking and advising are being irresponsible
surely not, for then that would be very bad
now then, how can you effectively shake up the consciousness and preserve the market? what would you advise everyone to do?
Is production linked to the vagaries of the price fetched and consumption ?
The official press release dateline 12th March issued by IOC (is this the same body as IOOC ?) "IOC EXECUTIVE DIRECTOR MEETS ACCREDITED PRESS IN SPAIN" is here:
http://www.internationaloliveoil.org/web/aa-ingles/corp/services/aa-services.html
P.S.
"The depreciation of the dollar against the euro appears to be stimulating exports to the US."
Thanks for the link. They are the same, yes, and I don't consult them much because they have the habit of editing posted documents when the facts prove them wrong.
Note that on page 6, they state:
These production estimates will probably not be reached because of bad weather during harvest time in some producer countries.
and
The estimates released in November 2008 for the 2008/09 crop year showed a rise of 12% in exports (635,000 t) and 6% in imports (668,500 t), but it now looks as though these figures will have to be lowered.
In other words, their production figures and consumption, assuming that 'exports' are mostly consumption, figures are wrong. They really don't know what the situation is.
Also, benefits to be had from USD exchange favour various other producing nations over the eurozone.
Also, with regard to your first question, at the margins - especially in lands not farmed directly by the owner - low consumption will eventually lessen production. Owners just won't spend the money to maximize the crop.
Mill sales, on the other hand, are affected in the short term. Beyond getting cash to cover operating expenses, many co-ops in Spain will refuse to sell at these prices. The end result this year may be another overstock situation come the autumn.
Shoshana - lower your costs and your expectations for the time being.
My question, is it going to change anything the more or less production?
Not at all.
I can undertand why some growers preffers a low crop... to see prices growing but the truth is that...
Plenty of olive oil can be found and prices dont get hihger because there is no sales and no cash...
as always, this is just a personal opinion.
Yago Cruz
Oi. Parabéns por seu excelente blog. Gostaria de lhe convidar para visitar meu blog e conhecer alguma coisa sobre o Brasil. Abração
Olive oil production should not be affected by the crisis. It's true that we are experiencing the greatest financial troubles in the history. This Olive oil called Bio Leaf from www.bioloeafusa.com is a great product. It's has health benefits to my life.
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