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Olives pitting US against EU in global trade fight

February 21, 2019

 

A trade battle is leaving a bitter taste in the mouths of Spain's olive growers.

Tariffs levied against them by the US last year have cost the industry $27m (£20.8m) and are likely to have lasting effects on Spain's olive-growing regions.

 

Antonio De Mora, general-secretary for Spain's Association of Table Olive Producers and Exporters (ASEMESA), says olive farming is a vital industry for Andalusia and nearby regions where there are few alternatives for jobs.

 

"The harvest of black olives has been greatly reduced as a result of the decrease in demand," he says.

 

"It is impossible to replace such an important market as the US in the short and medium term."

 

In June 2018 the US imposed tariffs on black olives from Spain, which it said were being sold below market value. It placed tariffs of up to 25.5% to counteract the alleged dumping and an additional duty of up to 27.02% to counter what Washington deemed were unfair subsidies from the European Union.

 

According to ASEMESA, exports of black olives have fallen by 60% since the tariffs were imposed.

 

Spain is the world's largest olive producer and exporter: the country exported $67.6m (£52.4m) worth of olives to the US in 2017 before any tariffs were put in place.

 

"If the customs duties remain, we will certainly lose the majority of the US black olive market," says Mr De Mora.

 

The original complaint came from two California-based olive producers, Bell-Carter Foods Inc and Musco Family Olive Co. The companies claimed that Spanish growers were selling their olives at 70% below their true market value.

 

California is the main olive growing state in the US with a climate similar to the Mediterranean. For nearly a century the US industry focused on "ripe olives" - the black olives that Americans typically use on pizza and in salads.

 

But in the late 1990s, many farmers began to switch to producing olive oil.

According to Sam Israelit, owner of Spanish Oaks Ranch in central California, many farmers switched because olive oil generated more value per-tonne than the ripe fruit.

 

"Consumers are willing to pay $20-25 for a good bottle of olive oil - and table olives just don't get that margin."

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