Condiments

Why Italy’s olive oil is a staple on the US market

The USA remains the main market of destination for Italy’s extra virgin olive oil, but there is still great uncertainty on possible duties for blends with Spanish olives

Although Italian olive oil is not officially on the black list of European products affected by US import duties, the rule may not apply to blends with percentages of Spanish olive oil. A recent analysis presented by Food at Oleificio Zucchi headquarters – during the Observatory on the olive oil supply chain – highlighted some possible implications on exports to the USA. Additional tariffs of +25% apply only for olive oils of Spanish origin, but in the case of blends the mixing is not considered substantial processing.

Consequently, the percentage of Spanish olives present in those products – even if they are packaged in countries whose olive oils are not affected by duties such as Italy, Greece and Portugal – would be affected equally. Implications would not be trivial, considering both the raw material prices fluctuation and the competitive dynamics.

ITALIAN OLIVE OILS EXPORTS TO THE USA KEEP GROWING

Meanwhile, the performance of Italian exports is positive. Starting from the United States, which is confirmed as the main destination market. ISTAT data processed by Federolio in the period January-July 2019 report sales of 57 thousand tons in volume, up 7.7% compared to the same period of the previous year.

EXPECTED SCENARIO

  • Psychological implications are more important than real quantities: exports from EU to the USA are worth about 100.00-120.000 tons;
  • Lower prices of the Spanish raw material;
  • Rigidity-increasing prices for raw materials of Italian, Greek, Portuguese and Tunisian origin;
  • Tensions on the imports market (Tunisian quota);
  • US market: prices rising on the finished product for duties not applied on bulk (facilitation for packaging plants in the US);
  • “Invasion” of Spanish packagers into European/Asian markets with increased competition rate.
© All rights reserved