Spanish Olive Oil Exports to U.S. Skyrocket Ahead of WTO decision

THE NATURAL JUICE obtained from the fresh, healthy fruits of the olive, extra virgin olive oil, is widely revered as one of the great ingredients in Spanish gastronomy.
Spain’s geography and climate – with extensive mountain slopes, mild or cold winters, and long, hot summers – are ideal for olive cultivation. The olive tradition existed prior to the Roman domination of Spain.
More than 350 million olives are grown all over Spain, and in some regions the olive landscape is staggering. This is the case in some parts of Andalusia where extensive olive orchards grow alongside Holm and cork oaks on broad plains or alongside green pine forests on mountain slopes, creating a landscape of outstanding beauty and personality.
Spain is also the world’s leading source of the golden juice of the olive fruit, the essence of Mediterranean cuisine. It produces about half the world’s total olive oil, of which about 46% is exported, making Spain the world’s leading olive oil producer and exporter. Average annual production of olive oil in Spain over recent years has been around 1.75 million tons.

With the prospect of impending tariffs imposed by the WTO (World Trade Organization) on European goods headed to the U.S, importers are stocking up on the golden juice from Spain.

Spanish olive oil exports to the United States increased by 40 percent in the first half of 2019, according to data from Spain’s customs agency.

Since January, Spanish producers have exported about $296 million of olive oil to the U.S., an increase of $32 million compared with the same period last year. Spurred on by these increased sales and helped by a poor harvest across the rest of the Mediterranean, Spain expect exports to hit a record high this year, exceeding 1.1 million tons for the first time.

However this isn’t necessarily good news as much of the spike seems to come from a demand for Spanish oil in the U.S. driven by fears of massive price increases. These price hikes will come into play if the World Trade Organization approves a 100-percent tariff placed on hundreds of different goods exported from the European Union to the U.S., including olive oil and four types of table olives.

The WTO has reportedly made its decision on whether or not it will approve the $15 billion worth of tariffs and will announce its decision soon. If the tariffs are approved, olive oil prices in the U.S. may double or even triple.

Increases this significant would likely price many Spanish olive oils out of the U.S. market. This has producers in the province of Córdoba especially concerned. In the current crop year, the second-largest olive oil-producing province in Spain has exported nearly 71,000 tons of olive oil to the U.S., which represents 22 percent of the province’s total olive oil exports.