There has been a strong demand for olive oil from Chania and from Crete generally over the past few weeks, with commercial representatives from Greece and abroad looking for every kind of oil. On the basis of data from the oil mills and information from oil market insiders, the big loss in European output this year, mainly in Spain but also in Italy, has increased the interest in Cretan olive oil. The increased demand has pushed up the price to the producer for extra virgin oil, with an acidity of 0.3 degrees or less, to between 4.3 and 4.9 euros per kilo. However, most of this oil is sold wholesale and without identification of its Cretan origin.
As a businessman who specialises in buying and selling olive oil told Haniotika Nea, “In the month of December there has been very great interest in buying extra virgin, virgin and ‘lampante’ oils produced in Chania, both from Italy and, unusually, from Spain.”
The president of the Agricultural Association of Palaia Roumata, Giorgos Motakis, told the newspaper: “At the moment there is very good demand for olive oil of all qualities. The interest in ‘extra virgin’ oil means that when the organoleptic characteristics and the acidity are good, it fetches a very good price.
“There is also strong interest in ordinary ‘virgin’ olive oils (with an acidity of 0.9 to 2.0 degrees), because those oils can be used for blending. There is also very great demand for the industrial ‘lampante’ oil, from 3.0 degrees acidity and upwards, which goes to industry.”
Prices are probably at their peak
Referring to prices, Mr Motakis said, “The most widespread at the moment is around 4.60 (for oil of 0.3 acidity) although I know of some areas and some mills where the price has reached 4.90 euros per kilo. I believe that oils of 2 to 3 grams [0.2 to 0.3 degrees] with good organoleptic properties can fetch the best prices since they will achieve very good prices on export.”
Michalis Hairetakis of the Chania Mill-Owners’ Association comments that this is a good moment for producers. “My personal opinion is that producers should sell their oil now, in 5 to 10 days, because the prices are excellent,” he says.
“Two days ago, we saw a reduction of 5-10 cents wholesale, which was not passed on to the producer, since the mills are currently engaged in a ‘battle of the sacks’ as to who can take on more customers. But olive oil is now an investment product where price fluctuations are governed by psychology and not by objective conditions and what is happening in the market.”
“There are many producers who have not sold their oil, not just from this year but also from last year and possibly the year before,” Mr Hairetakis says. “I believe that they could sell it now at a very good price. If for example I have 10 tons of this year’s oil and I sell it now I will get around 50,000 euros. With tax at 20 per cent I will pay tax of 10,000, which means I will clear 40,000 euros. If I do not sell the oil and prices dip to 3.50 per kilo, then after tax the producer will only clear 28,000 euros for the same amount. That’s a big difference.
“For me, this is the right moment to sell, because the prices today are unreasonable, and olive oil cannot stay at this level in the future. In our own area in Kissamos, most of the mills are paying 4.90 a kilo,” Mr Hairetakis ends.
Higher production but lower quality
With some 20-40 per cent of production in Crete and the Peloponnese having reached the mills as of this week, while yields have increased acidities have been high owing to late attacks by the olive fly. (Haniotika Nea, 14th December)
Olive oil yields are expressed as a ratio of kg of olives processed to kg of oil produced. According to data collected by the Association of Cretan Olive Municipalities (ACOM, or SEDIK in Greek), yields are currently running between 4.2 to 1 (23.8% of production) to 5.5 to 1 (18.2%), with most running at around 4.5 to 1. There has been some improvement in quality as the harvest proceeds, no doubt due to the falling of fruit affected by the olive fly, which therefore does not get processed. However, the general quality level is lower than the excellent result achieved last year, when over 85 per cent of production was between 0.2 and 0.3 degrees, chiefly because of the heatwaves
This year around 20 to 25 per cent of production is showing very low acidities of 0.2 to 0.3 degrees, with the bulk of production being between 0.4 and 0.6 degrees. Moreover some 5 to 10 per cent of the production is showing higher acidities of 1 to 1.5 degrees and above.
Greece moves to second place in Europe
The drop in production in Spain is also being seen in Portugal and France, as well as Italy. It is attributed to the historic drought and high summer temperatures, which have hindered the vegetative development of olive trees and the accumulation of oil in the fruits, according to a report on Greekreporter.com. Greece, however, is due to exceed last year’s yield with a production of more than 300,000 tons, thus overtaking Italy as the second largest producer of olive oil in the EU.
The EU produces about 67 per cent of the world’s olive oil. Around 4 million hectares, mainly in the EU’s Mediterranean countries, are devoted to growing olive trees, with a combination of traditional, intensive and super-intensive cultivation. Italy and Spain are the EU’s largest consumers of olive oil with an annual consumption of around 500,000 tons each, while Greece has the biggest per capita consumption with around 12 kg per person annually.
In terms of trade, the EU represents roughly 65 percent of world exports of olive oil. The main destinations for the EU’s olive oil are the United States, Brazil, and Japan.