Market Formulating as we enter Fall

By Don Griego on

Summer holidays are over and producers are almost all back to work. The holidays must have been good ones for Spanish exporters. Prices during the summer strengthened – with prices already at levels that are comfortable; to continue to see a firmer market made the days quite peaceful.

The OUTPUT in Spain in August remained at normal levels – and YTD OUTPUTS have been strong. If this trend continues – carry over – which will be very important for the start up costing of new crop. Currently, stock is 400,000. It looks like a carry over of 300,000 tons.

News on production outside of Spain was not particularly good. It looks like pretty average or below normal production. Only one producing country looks like it will have a banner year. IF Spain’s production falls below 1.3 Million (est. seem to be 1.5 still – need rain), market might be tight. Without rain until new crop, prices will remain at current levels until oil is being crushed.

So as you can see, the summer holidays were GOOD for the Spanish producers. It looks like the rest of year might not be as bad either.


Just a follow up to last month’s topic addition. We lost a contract for 2017 – which we quoted in late July / early August. Pretty significant volume. The order was just placed recently. The SPOT market is HIGHER than the last time frame when the prices were quoted. The EURO is higher than that time frame; adding to a higher landed cost. New Crop price indications are farther away from being quoted than end July / early August, as the first section has outlined. The supplier is looking outside Spain for better possible deals, again too early for December / forward offers.

In this scenario the retailer looks like they win – win BIG. The supplier at this point is in a deficit situation. They may be able to recoup some points once new crop is announced. Given our GUESS for costs on this business, the market or dollar would have to react in a very big way to even get to our levels, never mind below them.

This episode could have had a different result in the suppliers favor. Our philosophy is simple, we do not mind the clients WINNING, in fact, that is our goal – ensuring customer satisfaction and value. However, in order to keep a value – the supplier / importer need to make a simple return. We are just not sure, that booking out when NO PRICES are available for purchase is a long range viable sourcing strategy.


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Euro is stronger than last report, trading closer to the HIGH rather than the average. The Fed is getting closer to raising our interest rates. News out of Europe is quiet and that equates to a good situation.


Californian industry gearing up for another run at the Section 8 e provision in attaching additional fees to imported olive oil. Curiously enough the California imports from Chile and Argentina continue to grow. So it seems they do NOT have enough of their production and need to import oil. This sounds like logic right out of our presidential candidates. Interesting fact, one of the larger, if not largest, Californian producers is owned by a Spanish Concern. Another soon to be factor is owned by an Australian company. No comment just fact.


We were wrong, last month was NOT the worst time to by EV, this month is worse, not by much. If you are not covered – buy as needed. We were also wrong in stating – the market will be clearer. Conversely, the market is not clearer today. We have some contracts on EV, if you are in need of BULK EV, at somewhat below SPOT prices.

Although Turkey has some old inventory to ship to US, this category has BROKEN away from the normal separation of cost from EV. The cost between two categories are closer now, than we have personally seen them in a long time. Not a good situation to be in, if you are in need of refined. We do have some positions if you are in need.

Situation is about the same as last month. With EV and Refined prices being firm, there is some discussion that pomace will follow suit.

***** 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. 


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