Happy New Year
It’s been quite a long time since our last newsletter. September to be exact. There have been a lot of events in the olive oil market place. For 2019 forward, we will be recapping and highlighting happenings in the market. It will be a look back over the past 30 days. Please let us know, if you are still interested in getting this information, we know everyone’s time is valuable and we do not want to inundate you with emails you do not want to read. Just unsubscribe and we will take you off our distribution list. With that housekeeping out of the way, here are the main topics in the month of December.
1. Spain’s crop started to finally be harvested in earnest during the second half of December. Over 2, closer to 3 weeks delayed. The yield in December was quite low in the production, and if that yield level continues, we might see a lower than anticipated 1.65 million tons.
2. It was confirmed that Greek and Italian crops were woefully low this crop season.
3. Turkey and Tunisia crops were off versus last season’s historic level season. However, not much has been discussed about carryover. Both countries had large balances of oil OVER local consumption from last season, more in Tunisia (due to low levels of local consumption).
4. California Crop was confirmed to be very short and has many California producers scrambling to South America to fill their customers’ requirements. The sad news is some are using misleading labels to cover their imported oils that must be used to supplement their short production.
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WORLDWIDE FINANCIAL NEWS
December was a wild ride in the Stock Market. The largest single day drop in the Dow Jones. Other days some large gains. Overall a chaotic month, where it was hard to look at your 401 K levels. It was not so merry on the investment front.
On the topic of tariffs, we are surprised that there has been no great large-scale outcry from industries about the large duties they have to pay, and either raise prices or reduce margins. Honestly thought incorrectly that industry “cries of help” would have been more evident. Similarly, on soybean oil exports, it’s been relatively quiet. Domestic prices are soft, exports down significantly from previous crop years. Yet, for the most part the industry has been quiet on their plight financially. It is our sincere hope the Commerce Department has an end game, and a picture of what “winning” looks like.
NORTH AMERICAN OLIVE OIL ASSOCIATION/CALIFORNIA OLIVE OIL PRODUCERS
Although conversations have slowed recently, the mere fact that we are still communicating and exchanging thoughts and ideas on how to positively affect the market on a collective basis is good. A long way from a couple of years ago. There are cooperative programs that together we can raise a lot of funds and raise the whole category. It has been both parties reaching out to see some common ground.
COSTING BY PRODUCT – A LOOK BACK SINCE LAST NEWSLETTER
Since the Spanish crop was so delayed, and Tunisia did not weigh in late into December, prices took some time to soften. The market is somewhat stable after the softening.
REFINED / PURE:
Both Tunisia and Turkey raw material have brought the market price down in the past 60 days. Both have raw material to refine. Spanish Refined did not move downward as much as one would have thought. Even now, Spanish refineries are holding firm on pricing.
Market is still sluggish, and not sure what will break that cycle. Have not seen any reason for market price to advance.
CURRENCY FACTS – EURO UPDATE
October November December
Average 1.149 1.136 1.137
HIGH 1.158 1.145 1.145
LOW 1.133 1.125 1.130
Euro is in a lowering trend. Not sure what the Federal Reserve future actions might bring, or surprise trade tariffs might do to the currency market.