What To Do?

By Don Griego on

We have asked this question multiple times during the course of the day – every day. This will probably be the most difficult year to predict and source consistent quality and insure proper inventory levels. The crop is certainly off to a slow start with rains and uncertainty of pricing. It really has been a very LONG two weeks for the purchasing department. Prices have fluctuated about .15 cents a pound in less than a week’s time frame.

Spain was the only origin that had carryover. Buyers had no other place to go to purchase product in October and November (even before). It looks like the forecast of the crop will be pretty accurate; around 780/800 thousand metric tons. Now all one has to do is GUESS what the real carry of stocks will be. Math although not usually a major factor in the psychology of the market, nonetheless, reasonable people will have to look at the math of the production/stocks to see where prices will be headed. Let’s take a quick math lesson. Take 800 K crop and a 500 k opening stock position = 1.3 million tons available in Spain. Spain’s normal local consumption/exports are 105 k tons per month (1.3 million tons). So we are break even, and that means ONLY 210 K tons for carry over into next crop in Spain. What’s different between this crop and last year’s?

  1. Consumption and Exports and in Spain last year was over 135 K tons monthly. As Spain was the only source of exportable olive oil.
  2. Turkey had no crop last year, and they will have over 200 k this season. They will be exporting reasonable quantities this season.
  3. Tunisia had no crop last year, this year, the crop is approaching 300 k tons. They will have exportable quantities of all varieties.
  4. Greece’s crop last year was poor, this year much better and will be able to take care of local consumption AND export reasonable quantities, unfortunately the vast majority to Italy.
  5. Italy… hard to even comment. Crop is projected super small, and will not have nearly enough for local consumption, and PRESSURE is building on IMPORTS to Italy being     anointed product of Italy.
  6. Will Spain be an IMPORTER this season?
  7. What will Spain’s consumption/export be 105 or 135 or? That is an important factor in this confusion, and will likely be the major issue heading into the summer.

Each variety of olive oil will have its own background and purchasing story individually.


With the Californian and Spain’s crop hurting this season, PRICES will be higher than normal on Extra Virgin. So that may ease tensions in the differences between US and European retail prices.

On the chemical and organoleptic areas, the AOCS has sent out notices on being able to do testing according to the new Californian Standards.


Hostilities continue with ISIL and in the Ukraine. It looks like those conflicts will be with the world for a very long time. Gasoline prices are falling quickly, and U.S. Corporations and the stock market seem to be gaining momentum and doing quite well. Obviously, the U.S. is where most of the funds are flowing into. If the new Congress can find a way to get some good paying jobs into our middle class, our economy outlook could be very bright. Unfortunately, the hurdle is Congress. We will see if the new Congress can shift the conversation to jobs for the middle class.



As stated, this will be a very difficult year to hone on a good strategy for Extra Virgin. My best recommendation is buy what you need at least through the end of March. We are not sure if NOW is perfect time for this coverage. The lull in prices may come in 10 days to 2 weeks. UNFORTUNATELY, it may not come, and prices could escalate. The market is that sensitive. You need to get something on the books. Do not wait to time the market perfectly, it will be extremely difficult.


This market has not developed. Mainly due to the fact that Turkey and Tunisia have not been getting enough lampante to really make an impact on the market prices. Here we are waiting a little before taking any position. I would go as needed. Again, do not be surprised if market does the opposite, and demand is pent up. If early demand appears, than prices may not go down. My guess and gut tell me to be patient.


This item is following the price increase of the other two items. Economic principals would tell us, 1.7 million tons crushed – lots of crude pomace. Turkey and Tunisia will also have crude pomace now. Yet, raw material prices seem to be rising. The large gap between refined and refined pomace, have forced the prices upward. My recommendation is to cover until end March – April. New crop crude will be extracted about that time, and hopefully the refined olive oil prices will have come off, and we hope to see lower refined pomace prices as well.

***** All these suggestions are based on a stable Euro**** we have instruments in place to keep the currency stable with the flexibility to take advantage of a stronger dollar. 


U.S. Dollar has continued its run up against the EURO. It does not appear the European economy has enough to stop this prolonged run downward. We do not expect to see any strengthening in the EURO in the foreseeable future.

AVERAGE      1.2478

HIGH              1.2617

LOW                1.2356