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Another measure of the severity of the eurozone crisis: Olive oil prices

The price of olive oil has been crashing, as Spaniards, Italians and Greeks switch en masse to cheaper soya and sunflower oils.


 

When analysts talk about an oil crisis, it’s usually to complain about pain at the pump. But Europe is facing a different kind of oil panic. The price of olive oil has been crashing, as Spaniards, Italians and Greeks switch en masse to cheaper soya and sunflower oils.

Extra-virgin olive oil has fallen to below $3,000 a ton during the past year, half its 2005 price, and its lowest level in a decade, according to the International Monetary Fund.

In Italy, pasta’s heartland, prices dropped 38 per cent in the past year alone. Europe’s Mediterranean countries have been rocked by Europe’s fiscal crisis; in both Greece and Spain, the unemployment rate tops 20 per cent.

According to the IMF, olive oil prices have dipped almost as low as they did during the height of the financial crisis in 2008 and 2009, another sign of the severity of the current eurozone crisis:

The European Union has been pushing companies to stockpile olive oil to keep prices from falling, to little success, and the crisis isn’t contained to Europe. Olive oil imports to Canada are down 20 per cent this year. There is one bright spot in the global run on olive oil: emerging markets are developing a taste for extra-virgin oil. In China, demand is up 25 per cent.


 
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Another measure of the severity of the eurozone crisis: Olive oil prices

  1. Can’t stockpile olive oil as it has a shelf life. Never buy a bottle without an expiry date on it as at least it gives you some idea of the quality you are getting.

    “In European countries, producers are required to provide a “best used by” date (also known as a pull date) on every container of olive oil. The industry standard for this dating is 24 months, which leads one to conclude that oil will remain fresh for 2 years, but in most cases this is not true. Although occasionally an oil will not begin to oxidize within 2 years, most oils do become rancid within this timeframe. In fact, rancidity can often be detected just 1 year after harvest, and sometimes even sooner depending on storage conditions and varietal attributes.
    It’s important to understand that pull dates are not based on the age of the oil from harvest, but instead from the date when the oil was bottled. Consider for example that harvest was in November 2009, after which the oil was in bulk storage before being bottled the following March; that bottle will reach the store shelf with a pull date of March 2012 which is 28 months after milling.
    Let’s consider a different scenario in which the oil being bottled is a blend from two years’ harvests, which frankly is a common practice with many foreign producers. This product, containing oil from both the 2008 and 2009 harvests, if bottled in March 2010 would have a pull date of March 2012, however at that point some percentage of the oil will be nearly 3-1/2 years old!”

    http://www.oliveoilsource.com/article/date-or-not-date-olive-oil-labeling

  2. 1. Italy is actually a net importer of olive oil. In 2009 the Italians imported $1.3 billion worth of extra virgin olive oil, while exporting $1.05 billion.

    2. Even in the case of Greece, olive oil is tiny part of the Greek economy. Exports comprise $294.5 million (in 2009) on an economy of over $300 billion.

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