Some of the countries that are struggling most with the eurozone debt crisis – Greece, Spain, Portugal and Italy – now find themselves also facing an oil crisis – olive oil that is.
Prices have fallen to their lowest in a decade.
Southern European consumers are buying cheaper sunflower oil, which is cutting demand, while on the supply side a bumper crop in Spain has created a glut.
Spain is the world’s biggest producer; in the season just ended it accounted for 43 percent of global output. Spain, Italy, Greece and Portugal produced 70 percent of the total according to the International Olive Oil Council.
The problem is most pressing for Greece, which if it did have to leave the euro, would have to pay much more with weak drachmas for imported fertiliser, packaging and bottles.
Fanis Vlacholias, CEO of the Sparta Kefalas Olive Oil company, said he is very worried: “The worst scenario would be for production to stop and then eventually the company will just disappear. It’ll take us backwards many years and all our work will have been in vain.”
The European Union is to support prices by buying up to 100,000 tons of olive oil to put into storage and release later.
Changing tastes mean some countries – notably China and Japan are importing more – but nowhere near enough to make up for the sales drop in Europe.