Increase of duty-free olive oil imports from Tunisia and sinking olive oil prices in the EU due to the jihadist threat

duty-free olive oil imports from Tunisia

There is serious concern about the reduction in international olive oil prices presented recently in Spain, Italy and Greece. For the downward trend in prices is responsible the speculation on the part of buyers and large distribution networks, which try to reduce the price of the product, and in addition the decision taken by the Agriculture Ministers on September 17th, 2015 (Greece and Spain agreed, Italy disagreed). It is about the acceptance of the proposal from the European Commission to introduce an extra duty-free quantity of 35,000 tonnes of olive oil from Tunisia in the European Union (EU) for two years (2016 and 2017). This policy decision was taken in order to support the country’s economy that is threatened by jihadists.

It is mentioned that this proposal amends the EU’s current system of Rules 1918/2006, which provides for an annual duty-free import of 56,700 tonnes of olive oil from Tunisia to the EU. In other words it was suggested the increase in the quota of 35,000 tonnes for two years.

This decision had a catalytic influence on the Spanish market. Specifically while the period of 6-12 November 3,816 tonnes of olive oil were bought, the following week the amount was reduced to 2,875 tonnes (-24.7%). In Spain, the producer price for virgin olive oil has already decreased by 22%, that is from 4 euros per kilo has reached 3 euros. The same happened with extra virgin olive oil prices that fell by 6.25% the last week.

The President of the Greek Association of Industries and Packagers Olive (ESVITE) Mr. Karandonis, whο participates in the EU olive oil Committee, stated to Agrotypos “The first change has to do with the procedure for the duty free import of 56,700 tonnes of olive oil from Tunisia. While till to date there were monthly quotas from January 1st 2016 these are repealed. There will be weekly competitions until the quantities be exhausted. The second change is that for 2016 and 2017 it was approved an additional quantity of 35,000 tonnes per year. This quantity will not be activated until the exhaustion of 56,700 tonnes of the basic quota. So we are talking about a total quantity of 91,000 tonnes annually. This decision should be “typically” adopted next February by the European Parliament. It is a political decision taken by the majority of EU Member States. It is about the geopolitical situation in the region. Tunisia has problems with jihadists and the EU countries want to support the “secular” regime that governs the country. The only product that Tunisia produces and exports is olive oil. So France, England and Germany have decided to politically support Tunisia. In my opinion and according to the evidence we have in 2016 the olive oil production of Tunisia is not expected to exceed 150,000 tonnes, with export potential up to 100,000 tonnes. I think it is too early to take a similar decision for 2017″.

Copa Cogeca criticizes plan to increase duty-free import quotas for Tunisian olive oil.

Newly elected Chairman of the olive oil working party Mr. Andres Pinatel from France speaking in Brussels, said “We have a good harvest this year up 30% on last years’ levels, after serious drought last year. The quality is also good in many countries and European producers have been making good progress here in improving the quality of their produce. We are seeing more and more production of virgin olive oil in the European Union. And it is important that consumers are well informed of the good quality of the produce and its origins. But we have serious concerns about the EU Commission proposal to give Tunisia extra temporary access to the EU market with a duty free tariff rate quota of 35,000 tonnes of olive oil per year for a two-year period. Moreover, the proposal applies to all types of Tunisian olive oil, where production does not have to comply with the tough environmental and phytosanitary requirements that EU production has to comply with. This means that it will directly compete with EU production. Moreover it will create great “pressure” on producer prices in the EU. A priority for me during my two year mandate is to ensure that the duty-free imports of olive oil from Tunisia will be reversed”.

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