They view them with a certain optimism, although with some reservations, between the European Union and Mercosur. Above all, they value the “opportunity” of breaking into a market of more than 300 million potential consumers. But there are other voices than the agreement due to the fear that the oil produced in the Mercosur countries will be made without the demands or environmental controls that exist in Spain. And the table olive producers do reject the agreement due to the impact of the tariffs on their products.
The Minister of Agriculture, Fisheries and Food, Luis Planas, was the first to assess the “advantages” of the agreement for the olive sector. “We do not have to fear trade opening because we are an agri-food power,” he indicated last December. This week, the Minister of Economy, Commerce and Business, Carlos Body, pointed out during his appearance in the Congress of Deputies that around 37% of Spain’s olive oil tariffs are going to disappear with the trade agreement between the EU and Mercosur. In addition, he added that some studies indicate a possible growth of these markets, up to 40% for exports in Spain.
For the minister, this is “just one example of a concrete benefit” for the primary sector of the “many” that there will be. “These are always offensive interests and defensive interests, as they are called, in that in the end there is a bilaterality in the concessions that are made by both parties,” declared the minister. He also highlighted that there are some 350 denominations of origin protected at the European level, 59 of them in Spain, such as Valencian citrus fruits, saffron from La Mancha or the Guijuelo denomination, among others, which will be favored by this agreement.
Producers are also waiting expectantly for the trade agreement to come into force. “The impact is going to be positive, since Europe exports more olive oil to Mercosur than it imports, without a doubt it will be a good opportunity to expand markets,” said Juan Vilar, an olive grower from Jaén and olive oil consultant. Experts consider that Mercosur will gradually reduce tariffs on EU olive oil, and estimate current production in the countries of Chile, Argentina, Brazil, Peru, and Uruguay at around 80,000 tons. But there are other voices that are suspicious of this agreement, such as that of Antonio Luque, president of the Dcoop group. “If we are going to be able to produce oil and other products without the environmental and social controls, without the demands that we have in Europe, here we will have to dedicate ourselves to something else,” he warned.
For his part, the president of the Protected Geographical Indication (PGI) Jaén Oil, Manuel Parras, observes more lights than shadows in the trade agreement with Mercosur. “It is a good opportunity to expand markets in other countries and confront the protectionism of the United States and China, especially at a time when domestic consumption is suffering due to the effects of olive oil prices,” says Parras. , after indicating that in 2019 130,000 tons of extra virgin were consumed in homes, compared to 35,000 today.
However, the agreement with Mercosur has provoked rejection by those at the Spanish table, who see it as “a new threat” for a sector that has been severely punished by the impact of tariffs for many years. The Spanish Association of Table Olive Exporters and Industrialists (Asemesa) considers that, by virtue of this agreement, the Spanish olives that are exported to the Mercosur countries will be excluded from the benefits of the Treaty, so they will continue to be taxed with tariffs. of 12.6%, while imports from South American countries will be liberalized, since entry tariffs into the EU will progressively disappear from the current 12.8% to its total elimination in seven years, giving rise to a serious competitive imbalance.
Asemesa adds that the situation is even more serious given that Egypt, one of Spain’s major competitors, has had a trade agreement with Mercosur since 2017, thanks to which tariffs on Egyptian olives will disappear completely in 2027 while those on olives from of the EU and Spain.
Fall in oil prices
Olive growers have raised the alarm about the collapse in the price of olive oil, which in a few weeks has gone from eight euros at origin to just under four. “The trivialization of oil with the drop in price impoverishes the Spanish olive grower and enriches the export industry,” says the head of COAG’s Olivar, Juan Luis Ávila, for whom “there has been a totally artificial drop in prices, because there is no objective market data that forces this decline.”
The COAG has demanded that the Government force an investigation by the National Commission of Markets and Competition (CNMC) into possible agreements in the purchase and sale of olive oil at origin, given the suspicion that prices are being drastically forced to the low, even below production costs. They also ask for the elimination of the quota on oil from Tunisia, due to “serious distortion” of the market in the European Union.
Cristóbal Cano, general secretary of UPA in Andalusia, has blamed the cooperative sector for “decisively contributing to this suicidal spiral by giving away the oil, with operations below production costs.” In his opinion, the situation of the price of olive oil “is due solely and exclusively to the operations carried out in Spain, which is the first producing country, far removed from the rest of the countries.” “It’s enough to blame the olive grove superintensive from Portugal, to the oil from Tunisia or to the supposed mixtures instead of worrying about marketing with value and not about giving away the oil the cheaper the better for some,” Cano pointed out.
From Cooperativas Agroalimentarias they admit that in the current context of uncertainty, the natural tendency of producers is to sell as soon as possible to try to benefit from prices before they fall, “which causes buyers, faced with this massive supply, to delay their purchases and lower the price”, although they assure that the cooperatives are not participating in that commercial strategy. “It is necessary to avoid self-interested actions and individual movements of farmers so as not to condition the market that shows clear symptoms of tension in product availability,” they indicated.
