Does the supply and demand law rule the olive oil market?

Spain: First producer of the world

Spain is by far the main producer of oilve oil in the world. Our country leads the ranking of producing nations with around 55% of the worldwide olive harvest.

 

Nevertheless, since the southern Spain went through a drought, last crop here went down to 825.000 tn, meaning only almost 50% of the Spanish harvest we had last year (2013).

Everyone who is familiar with this sector knows that olive oil market is subject to enormous competition. Yet, the supply and demand law could temp the Spanish olive growers to increase their prices. 

 

Spain: aspiring to the title of ´first exporter of the world´

But, in the end,  they operate in a global scene so the said policy will surely bring them undesirable consequences.

With an eye on its eternal rival, Italy, in the last years Spanish olive oil packers have been struggling to conquer and strengthen markets abroad. And it is crucial a smart decision-making when you want to preserve a leading position, even if a poor crop comes -as it is the case lately-.

For instance, Spain is trying to be a leader in the United States olive oil market, which is the first importer of the world for this product (38% of the imports).

Evolution of total U.S. Olive Oil imports per country

Source: International Olive Council -http://www.internationaloliveoil.org/-

 

The 2012/13 season was not good and, as can be seen in the table above, Spain lost near to 10% of its market share in the United States. Reducing the supply and not keeping competitive prices has a price to pay too: a client thrown away. Playing in a such a competitive game simply means that customers have the upper hand.

Needless to say the effort and high costs of getting new customers, the broad consensus within the olive oil Spanish experts is that sacrifices must be done. In order to assure our competitive position in the world, the major packers/exporters are led to buy somewhere else around the Meditteranean sea at the expense of the  trade margins –mainly of the local growers-.  

Arbequine: the Queen of the Aragonese hills

Now that the olive harvest is taking place in northern Spain and the first olives of the season are being milled, it is the best time to speak about the Arbequine variety.

This renowned early and tiny variety of olive is the preference among the virgin olive oil gourmets. It is not in vain that many of them refers to the arbequine juice as the Beluga of the olive oils.

 

Since not every olive juice is the same, we encourage you to check the critical factors that boost this wonderful elixir to the gastronomic Olympus:

1. The best flavour, aroma and palete possible. It has a very  pleasant round taste, boasting a fresh fruity sweetness rounded with a distinctive bitterness. In mouth it feels silky and it leaves an intense long finish. It usually displays a nose of ripe fruit and almond.  It is just delicious when eaten raw over a crunchy slice of toasted bread.

2. It is popular for its green tones, especially when the olives are harvested at the earliest stages of maturation.

3. The arbequine oil is characterized by the inestability of its chemical compositition. Since this variety is more sensitive to oxidation, the fragile balance of its sensory attributes demands proper conservation conditions. Fresh and dark environments increase the product lifetime.   .

4. The growing region. The above said, the arbequine variety displays different sensory features depending on the type of soil and climate conditions associated to the place we find the plant. Arbequine trees require cold and continental climate in order to perform at their best. The vally of the Ebro (Aragon, where Lady Godina is situated) meets naturally these requirements so we can find traditional arbequine crops that need less use of chemicals.  

5. Here in the heart of Aragon, the tradicional cultivation system is the most widespread. For centuries, when the agriculture mechanisation and the artificial irrigation did not exist, the ancient groves followed a low density plantation pattern  (between 80 and 120 trees per ha.) that still remain the same nowadays.  

6. Although traditional cultivation does not allow high production rates, arbequine olive stands out among others for its high fat yield. Once the milling process is done,  we obtaing small but excellent product.

7. In the same way as wine, it is sometimes interesting mixing different varieties of oil - such as Picual or Empeltre among others -  in order to obtain a coupage of more complexity.