Prices in the production chain of biological oil

Because of record-price decrease of the olive oil paid to Italian oil producers the need for transparency is evident; as the new regulation to indicate on the label the origin of the olives, used for the oil put into the market. The aim is to avoid that the oil obtained from Tunysian or Spanish olive-pressure, is passed off as Italian, as it has recently happened on national and foreing markets.
The Unasco is strongly worried about this decrease in price of the extra virgin, which had a further drop (12%) in December 2004, as the data of the Ismea report.
Moreover in the last ten years, the price paid to the agricolturists of the oil per kilo had a 33% decrease.But the olive oil still stands out as key-protagonist of the Italian oil scenery. As already said, the olive oil production amounts to € 2037 m.,about 4,6% of the total Italian agricolture. We reckon that timely measures are fundamental to prevent a false Italian olive oil to be introduced on the international markets, even if bottled inside the country, but obtained from foreign olives, unknown to the consumers; this process could damage the incomes of the Italian enterprises.Which is the solution, then? Producercs pointed out one a lot of time ago: as soos as possible Italy must introduce the 204/2004 law: it provides the obligation to indicate all agricoltural basic products used, thus concretely preventing false oil, obtained from Tunisian and Spanish olives, to be passed off as “made in Italy” oil.This law represents the first means to defend the 35 extra virgin olive oils already recognized by the E.U.. Some aid could come from Bruxelles. But we have not many hopes. The E.U. commitee longs to a unique regulation about labelling and packaging of the products, able to substitute the two already existing together, with other 25 of the same number of number-states. Bruxelles launched a public referendum among producers and consumers to reach this aim. The result of this referendum will turn out into a discussion among the members of E.U. to find a series of proposals to workout, maybe, a regulation within the end of 2006. As for the E.U. this initiative will improve consumers’ protection making life easier for producers. Indeed, only through the regulation array to international standards European products can be commercialized all over the world without changing the label. Finally Italy is convinced that the referendum-period will probably be useful to establish, if for example the consumers are more interested in the quantity of sweetners contained in a product than in the quantity of the product ,or if water is included or not in the list of the ingredients of chilled meals.
On the 8th edition of Biol-Prize, the International Observatory on the biological olive-colture focused the attention on the study of price of a product as peculiar as bio-oil. It is necessary, over all, to state that the price of a product reflects the progressive balance in the market between offer and demand and it depends also on the size of the market. The price, according to the theories of marketing, shows the value the consumers give to certain goods in terms of utility; on these premises consumers decide which quantity of this product they are willing to purchase.Therefore, the value the consumers acknowledge the biological oil, represents their availability “to bear” the premium price (the difference in price between bio and conventional oil), because they are aware this product comes out from precise rules and in the respect for the environment. Considering the peculiarities of bio-market, price-performance gains great importance; in fact the biological colture will probably spread when a substantial piece of the market recognizes the bio-products as beneficial for our health but over all for the environment.
The offer makes evident that in this field fewer quantities of products come out, compared to the conventional product; there are even higher production-costs due to specific certifications.
As for the transformation and distribution stages, the dealt quantities are limited. The transformation-tecniques are craftmade and the transport system often reveals ineffective; furthermore the market is completely split, as production is carried out in the south but consumption and transformation are concentrated in the north. As the bio-market is a so-called niche-market, it allows wider commercial margins because the consumers are willing to pay higher prices. As for the demand, the consumers are spurred to use these products because they are more trustful both for our health and for the environment (after so many scandals in the field of food). In fact, food consumption is also determined by psychological and cultural reasons: this is why the typical, certified quality products in general are so successful. The bio-market acts in a particular way along the “filiera”, as niche-markets usually do.
In fact this is supported by a recent study. Before analysing this research we must take into consideration the problems this sector faced during this campaign. In fact fly-attacks hardly affected the quality of the product, causing also difficulties in the phase of marketing.
Twenty sample-enterprises (oil-mills, farms, cooperative-mills and wholesalers) were studied.They were provided with ICEA-AIAB certifications. These sample-firms were given, via e-mail announced by a telephone-call, a gathering form. Some direct surveys were led for the phase of distribution (large-scale distribution) and some e-mails were sent (for specialised retail).
An evident price-gap between packaged and loose product emerged, showing an unsuited valorization of the product. These difficulties are to be found in the first phases of production and transformation, when oil is usually sold as loose-product.
Only when the producer owns the right means for packaging he can get satisfying prices (he makes the production chain shorter). According to some bio-operators’interviews, bio-products have shorter due-dates and a lower stock turnover. Even fashion influences our food-choices. In fact, in this period DOP-IGP oils are being very successful. - COI – More olive oil in the mediterranean area.
The olive oil production is increasing everywhere, particularly in the mediterranean area; and even the world consumption of the oil is improving: according to the data spread by the COI, the international council of oil, the average increase of the total production has achieved 5% a year in the last years with a corresponding increase in demand. The results were announced during Enovitis, exibition addressed to wine and olivecoltures at Milan Fair.
Among the mediterranean countries the best in production was France (+ 5%), followed by Turkey (+ 4,6%), Spain (+3,7%), Italy (+3%) and reece (+2,3%).in the southern part Jordan (+6,5%) and Syria (+4,7%) are very active. Olive oil demand is increasing particularly in developed countries as the USA, main importer with 8% percentage; while in Europe the United Kingdom ( +16,3%) and Germany (+9,6%) rule.This trend , the organizers say, has awaken also the interest of machinery-producers and the treatments (for the olives)-producers: they are moving again.