Has the severe drought caused olive oil prices to rise?

Olive oil consumption growth in the Chinese market outpaces other edible oils, but consumers have a low ability to distinguish it.

The reporter has learned that according to reports, Spain, the world's largest exporter of olive oil, has recently been affected by a rare drought in nearly 140 years, and the oilseed analysis agency Oil World recently estimated that Spain's local olive production this year will drop by nearly 40% compared with last year.

The industry judges that the price of imported olive oil in China may rise by 30%, which may benefit listed companies that have already established operations in major overseas production areas.

A reporter from this newspaper learned from local distributors that in the second half of the year, the price of imported olive oil in China will rise sharply due to a sharp drop in supply, and olive oil on the market may also increase in price by then. “The consumption growth rate of olive oil is higher than that of many other varieties. Because olive oil is still in its infancy in China, there are phenomena such as uneven quality and consumers not knowing how to choose.” said a practitioner in the edible oil industry.

“In the second half of the year, imported olive oil is very likely to see price increases of varying degrees, but this may benefit listed companies that have already established operations in major overseas production areas. After all, with grain in hand, the heart is not panicked.” said a practitioner.

It is reported that because olive oil prices are expected to have a relatively high probability of rising, some distributors may have suspended sales, hoarding goods and waiting to sell when prices are high, which may further intensify the extent of the increase.

The above practitioner believes that affected by the Taiwan issue, gutter oil, reduced Spanish olive oil production, and other factors, olive oil listed companies with raw material guarantees and performance support, such as Xiwang Foodstuffs, may benefit indirectly as long as they themselves do not produce a “black swan,” and oil, as a “rarely vocal minority” among foods, may also receive more attention due to recent events.

The reporter learned that edible oil giants such as COFCO, Luhua, and Arawana have entered the olive oil field to expand their territory, and the industry is relatively optimistic about the prospects of this category; the photovoltaic giant Yingli Group also entered the olive oil market two years ago and has taken a “low-price” route to seize the market. It claims it wants to squeeze the water out of olive oil prices, with an average price 30% lower than similar products.

Survey:

Olive oil prices vary widely and require careful differentiation

According to data from the International Olive Council, global olive oil consumption has risen steadily over the past 20 years, and current annual consumption is about 2.3 million tons, partly due to greatly increased demand from developing countries such as China and India.

Data show that Spain accounts for about 50% of global olive oil production. This year, production in other major producing countries may reach average levels, but it cannot fill Spain's supply gap, because Spain's olive oil harvest was poor in previous years, resulting in low inventories.

A reporter visiting supermarkets in Guangzhou found that there are many olive oil brands with different selling points, including concepts such as extra virgin, organic, and pure, with prices ranging from thirty or forty yuan to four or five hundred yuan. Many consumers said they mostly choose olive oil with a moderate price and a brand they have heard of.

“Consumers have a low ability to distinguish and cannot tell the differences among brands and grades.” a distributor engaged in the olive oil business in Guangzhou told the reporter.

According to him, olive oil prices on the market vary widely; those above two hundred yuan move relatively slowly, while those around one hundred yuan sell better. It is understood that there are also some low-priced products on the market claiming to be olive oil whose actual content is negligible. “The proportion and grade of olive oil directly affect its quality and selling price, and consumers should understand this a little.” the distributor believed.

How to choose olive oil?

First, look at the CIQ label

Original imported olive oil all has a “CIQ” laser label, while domestically repackaged products only have the QS mark.

Second, look at the grade

According to national standards, olive oil must indicate its grade, such as virgin olive oil, extra virgin olive oil, and medium-grade virgin olive oil.

Third, look at the ingredient list

Refined olive oil and blended olive oil are allowed to add a-tocopherol; virgin olive oil, however, is required to have no additives at all.