US President-elect Donald Trump’s proposed tariffs on imported goods are adding pressure to the already deeply strained European olive oil sector.
During his campaign, Trump – who secured a second term at the White House in last week’s elections – proposed blanket tariffs of up to 20% on all imported goods, rising to 60% for Chinese imports.
Spanish olive oil producers who supply the US market are now prioritising shipments to America before Trump’s inauguration over fears these debilitating tariffs will go through from January onwards, according to the head of one of the UK’s biggest olive oil suppliers.
This is because “the cost of storing oil in the US is considerably lower than the potential cost of tariffs”, said Filippo Berio UK MD Walter Zanre.
However, this is “leaving little new season oil available for other buyers and markets”, adding further strain to a sector that has suffered greatly from drought conditions in recent years.
European olive oil producers have seen their output plummet in the past few years due to extreme drought across the Mediterranean.
This year’s harvests were finally set to improve by 32% compared to last season, according to Brussels’ recently published agricultural short-term outlook, bringing the estimated total yield for the upcoming season to two million tonnes.
But recent storms in Spain, the world’s largest olive oil exporter, have delayed the harvest season and raised concerns about potential damage to the crop and quality.
Additionally, the heavy rains seen across the eastern area of the country in recent weeks have caused major logistical problems as both road and port infrastructure have been badly damaged.
“What little new season oil is available cannot be transferred to the ports for shipment, due to the infrastructure damage and disruption,” Zanre said.
Roads are still blocked by piles of cars and trucks, and container processing times at crucial ports such as Barcelona and Valencia have still not returned to normal, The Grocer reported last week.
The sector is expecting “a massive pinch-point in supply”, Zanre said. “Bottlers have run down stocks in anticipation of the arrival of cheaper new season oils,” he added. “The Trump situation does not help”.
“Very limited supply and high prices means bottlers are now forced to cut back production as they have no oil,” Zanre said, warning of potential shortages over the peak holiday season.
“The result will be availability issues during December and January. We will see gaps on supermarket shelves.”
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