'Proposing a global stockpiling strategy to balance the market is not feasible if the measure is not incentivized'

Iñaki Benito Otazu, Managing Director of the Fundación Patrimonio Comunal Olivarero

It seems that we will have a national olive oil production slightly above 1.4 million tons, compared to the somewhat less than 1.3 million tons estimated at the beginning of the 2024/25 season. Will FPCO have more work managing supply than in previous campaigns?

The levels of contracting storage units within the FPCO network in the last two years have been the lowest since the foundation of this entity in 2003.

Since the beginning of the year, we have seen higher activity, which is somewhat logical given the progressive increase in product availability in the market. However, since the campaign started with operators' warehouses almost empty, we are still far from the usual contracting levels.

As long as internal demand and the foreign market are able to absorb each season's olive oil production and even more… is it pointless to think about creating strategic stocks to self-regulate supply and demand by industry operators?

I believe that beyond the particular strategies of each operator, proposing a global, sector-wide stockpiling to provide a better balance for possible future deficit seasons is not feasible unless the measure is imposed or incentivized.

Would the Spanish olive oil sector, especially at the commercialization level, have fared better if a strategic olive oil stock had existed in the two previous lean seasons?

Commercialization levels have been very positive considering the prices the product has reached. Consumers have shown great loyalty. In reality, more oil wasn’t sold because it wasn’t available. If we had started with larger initial stocks, it is likely that prices would have been more moderate and commercialization would have been greater.

Now it seems unthinkable, but would it be possible to create that strategic stock if we face seasons with a significant offer and a demand that cannot absorb it... or should we simply leave it to the market to adjust supply and demand through (ruinous) prices, causing losses mainly for the producing sector?

As I mentioned earlier, if it were an incentivized measure, like the “private storage” provided for in community regulations, or a mandatory measure, like if the Ministry of Agriculture, Fisheries, and Food ordered the withdrawal of a certain percentage of production from the market based on Article 167 bis of the same regulation, there is no doubt that we would achieve, at least temporarily, a rebalancing between supply and demand and consequently prices.

Implementing a voluntary measure for the entire sector would, in practice, not be viable.

What functions and objectives does FPCO have, therefore, in both situations, and what do you think it should have and doesn’t, and why?

The goal of FPCO is always to maintain a storage service that the sector can use whenever it suits them. Undoubtedly, the storage network is more useful in situations of excess supply, playing an important role in market regulation.

The infrastructures that make up the network date back to the mid-20th century and were designed in a context and for needs different from the current ones. The FPCO network requires gradual renewal and adaptation, and this is a priority. We must also constantly assess the viability of the centers in the network and evaluate whether the locations are appropriate, considering the ongoing development of the sector.

As an expert in this sector, how do you see the global olive oil market, with Turkey, for example, emerging as the leading producer ahead of Tunisia; with Italy struggling as a producer but attempting a comeback; with the U.S. still leading extra-EU imports, etc.?

Indeed, Turkey is positioning itself this season as the second-largest producer of olive oil in the world. Historically, its productions have ranged from 100,000 to 150,000 tons, but two seasons ago it recorded a record figure of 450,000 tons, which it seems capable of repeating. Along with Tunisia, these two countries will produce more olive oil than the entire EU, excluding Spain. This is significant, as they will play an important role in trade flows.

Meanwhile, within the EU, and leaving out the atypical last two seasons, Spain still holds a position of absolute leadership, especially since Italy has not exceeded 300,000 tons of production for almost 7 seasons, and Greece is producing similar figures. Portugal, however, continues to show its potential, consolidating figures around 200,000 tons, with even greater projections for the coming years, especially considering the margin for new plantations with available water resources in the country.

Regarding demand, we are facing a very changing and heterogeneous society with continuous new consumption and buying habits that must be adapted to quickly and effectively.

The U.S. will remain the key extra-EU market, difficult to replace, so we must be alert to the decisions made in that country and hope that trade is not disrupted in favor of third countries.

Fortunately, there are many markets to continue consolidating and conquering, not forgetting the domestic one, so promoting the product and harmonizing commercial regulations are essential.

At the end of 2025, the final results of the Predimed Plus study are expected to be presented, which is supported by FPCO, on medical evidence of olive oil as a healthy product. Can you provide some insights into what is expected from it?

The PREDIMED Plus study has been one of FPCO's major investments in medical research and is expected to be, as published by Nature Medicine in 2023, one of the clinical trials that will change medicine worldwide in the coming years.

Nearly 7,000 people aged 55-75 with overweight/obesity and metabolic syndrome participated in the study, where they were given a hypocaloric Mediterranean diet with extra virgin olive oil as a key element, along with the promotion of physical activity and improvement of psychosocial factors over 8-10 years. The results so far have shown a significant reduction in body weight and abdominal adiposity, along with improvement in vascular risk factors, mainly the incidence of diabetes, optimization of gut flora, and improved cognitive function.

This improvement in vascular risk factors suggests that there will also be a reduction in the incidence of major cardiovascular complications, a finding that will be known at the end of this year.