Brussels, May 22 - Europe's farm chief ruled out any move on Monday to open import quotas or cut tariffs to help bring down olive oil prices after a dismal harvest last year in Spain, the world's largest producer of the commodity.
Although she recognised that EU olive oil prices had been inflated recently, Agriculture Commissioner Mariann Fischer Boel said the market situation was improving, with good prospects for the 2006 harvest -- and so there was no need to act.
Sweden, backed by Britain and the Czech Republic, had complained of exceptionally high olive oil prices due to a small 2005/06 olive harvest, worsened by low stocks, so consumers and food manufacturers were forced to pick up the extra cost.
The situation was made worse by high import tariffs, it said in a paper presented to EU agriculture ministers on Monday, even though the EU is the world's largest producer of olive oil and usually only buys minimal amounts from outside the bloc.
Average market prices for products such as extra virgin oil and virgin olive oil stood around 40 percent above a threshold where the Commission may act to guarantee adequate supply -- EU code for altering import duties and setting import quotas.
That had been the case since last September, Sweden said, demanding that Fischer Boel either had to cut the EU's import tariffs -- which vary between 53 and 65 percent, depending on the grade of olive oil -- or open a special import quota.
The EU accounts for around 80 percent of global olive oil production and a similar share of consumption.
Spain is the top producer, while Italy and Greece are the second and third largest, respectively.
Fischer Boel said the EU olive oil market now appeared to be correcting and supply on the rise again, so prices were falling.
"After uncomfortable climatic conditions least year in Spain and Portugal, the result of the harvest was not that good, and that has influenced prices," she told a news conference.
"Since March, they (prices) have started to decrease partly because of lower consumption in Spain -- and suddenly there is a better balance between supply and demand," she said. "We do not see any reason for interfering in the market."
The EU is a major exporter of olive oil to countries such as the United States, Brazil, Australia and Japan, and has doubled its exports to 324,000 tonnes in the last 10 years.