El estrechamiento de márgenes comerciales en la cadena agroalimentaria de los aceites de oliva en España obliga a las empresas del sector a operar de forma más eficiente, sobre todo en el mercado de origen, dada su posición abastecedora de materia prima. Este trabajo estudia las relaciones de causalidad entre los precios de las calidades de aceites de oliva comercializadas en dicho mercado, a partir de la teoría de cointegración y el Modelo de Corrección del Error, concluyendo que la calidad virgen es el aceite líder, pudiendo utilizarse como variable predictiva del comportamiento de precios. Abstract:
Olive oil is a strategic sector in Spanish agriculture, as a main producer country in the world and as a symbolic product for Spanish society (in terms of economy and culture). However, in the last decade olive oil sector is supporting very low commercial margins and it has important problems of profitability. In a context where retail distribution plays an essential role in final price fixing and, therefore, in the total shared amount by all sector agents, the effectiveness of buy-and-sale strategies along the chain influences the commercial results of the different agents.
In particular, the main income of olive oil producers comes from oil marketing in the market of origin, which integrates the maximum percentage of dealings (80%). The commercial operations in this market are the references for price negotiations in other levels of the agri-food chain, for example, with distributors. In this scene, Andalusia has a predominant role because it concentrates the Spanish production of olive oils (72,40%). So, the trading operations in this area determine, in part, the national price level and they have a high influence in worldwide prices.
Due to its position as a supplier row material, the market of origin is playing a key role in the incomes of all the agents in the chain. For this reason, the study of price formation, its dynamic and the variables that can influence in this process, is needed in order to know the price evolution and therefore, to decide the best moment to buy and sell.
In this sense, from our point of view, in the literature is possible to underline two main characteristics that could influence in price’s evolution. (1) The prices of different quality levels are very similar. Price’s differences are small and this fact contrasts with the public strategy to improve the quality of Spanish olive oil production (quality programmes from national and regional government and the European Union). And (2), in the last decade, these differences between qualities are constant and with a similar evolution. So, it could be possible to predict price’s evolution only with the price of a quality and adding some cents in order to know the price of the rest.
Based on the social context and the development of databases in the market of origin in Andalusia, the objective of this paper is to analyse the casual relationship between the prices of three qualities that are sold in origin: extra virgin, virgin and lampante. The methodology used to study the price evolution and its relationships is based on the cointegration theory, the Error Correction Model and it is completed with the study of short-run relationships through Granger’s causality, variance decomposition of forecast errors and impulse response functions.
Analysis includes 106 monthly data of each price series for the most instability period in the market of origin (since January’01 to October’09). This information was provided by the Foundation for the Promotion and Development of the Olive Grove and Oil, based on the POOLred System of origin prices. This system collects the features of bulk olive oil transactions of a sample of Andalusian olive oil mills that represents 55.30% of Spanish olive oil production. It is currently the main price reference in this sector.
Results show that, in long term, origin is a strong integrated market and it is in equilibrium because the prices of three qualities move together during all the period. However, in short term, it is possible to highlight the virgin olive oil as a leader in the market. It is the quality more independent and with more influence over the rest. So, price movements of virgin quality could predict the evolution of the other price’s qualities.
These outcomes are coherent with the role of virgin quality in the market of origin. Virgin olive oil is the quality with more number of commercial operations in the market. This volume is a consequence of its versatility, because can be used as direct consumption product, to mix with other olive oils or to refine.
On the one hand, the direct consumption of virgin quality, similar to the virgin extra olive oil, could be an influence in the price of the last one, adopting a role of direct competitor. In this sense, the use of extra virgin as a bait product for distributors reduces the differences between both prices and increase the competency. Furthermore, the consumer’s confusion between different qualities of olive oils favours this situation. On the other hand, because a part of virgin’s production is used to refine in order to produce olive oil, its prices could be a reference for the price of lampante.
At the same time, the strategy of quality implemented by public administration is increasing the volume of virgin and extra virgin olive oils produced in Andalusia and, therefore, the numbers of commercial operations with these qualities in the market of origin. So, when quality production exceeds consumption, a part of these olive oils is destined to elaborate low quality olive oil and it increases price competition.
In sum, the large number of operations and its versatility transform the virgin olive oil into the quality more important in the market of origin, from the point of view of price influences.
This conclusion is useful to develop managerial strategies, specifically in the forecasting of price behaviour in the market. Because the prediction of price evolution in origin market is affected by several subjective aspects (crop level or weather prevision, for example), the use of an objective predict variable, as a virgin olive oil price, could improve the results of the models. Particularly, these results affect to the study of prices in order to request to government the intervention of the market through private storage system (Spanish Ministry of Agricultural and European Union). Furthermore, in general these results are useful for the development of agri-food policies by sector institutions, which analyse the prices in the market of origin in order to make decision about funding and grant. Finally, this paper could be a starting point to analyse causal relationship between different olive oils in the two main market of the agri-food chain (origin and final market), with the objective to know what variables have to be included in price’s forecast models. Classification-JEL: R1 Keywords: Modelo de precios, Aceites de Oliva, Causalidad, Calidad, Mce, Price, Olive Oils, Causality, Economic inequality, Ecm Pages: 157-175 Volume: 3 Year: 2016 File-URL: http://www.revistaestudiosregionales.com/documentos/articulos/pdf-articulo-2507.pdf File-Format: Application/pdf Handle: RePEc:rer:articu:v:3:y:2016:p:157-175