Olive oil futures market launched
13 September 2004, MALAGA - A Spanish company is hoping to persuade international investors to put money into the world's first olive oil futures market, it was reported Monday.
13 September 2004
MALAGA - A Spanish company is hoping to persuade international investors to put money into the world's first olive oil futures market, it was reported Monday.
The exchange, set up in March by Andalusia-based firm MFAO, is currently used by olive growers to protect themselves against price swings, the BBC reported.
But MFAO is also keen to attract speculative investment by major financial institutions.
"That is the objective," said MFAO's Lamberto Samper.
"The day that an American fund puts olive oil futures into its portfolio, the job will be done, we can retire."
But the money moguls of Wall Street have not rushed to start trading in olive oil futures yet.
They occasionally trade in agricultural derivatives such as wheat, soybeans and tropical vegetable oils, the market for European olive oil futures is untested.
Just 10,000 one-tonne olive oil contracts have changed hands on the MFAO exchange in the six months since it was established, well below the company's full-year target of 200,000.
There are fears that the new exchange may go the same way as Spain's citrus fruits futures market, which was abandoned a few years after being set up in 1995.
But MFAO hopes trading in olive oil will pick up when the 2004 harvest starts.
Olive oil prices are also highly volatile, which means that growers and producers have a strong incentive to buy futures as a means of hedging against price fluctuations.
Spain is the world's biggest olive oil producer, accounting for 40 percent of the 2.5 million tonnes produced worldwide every year.
Subject: Spanish news