Oil market loses breath with price increase and recession

The oil market, which grew at double-digit rates annually in the first half of the decade saw his pace of expansion dropped by half from 2015. A combination of crop failure in Europe and devaluation of the real against the euro and the dollar worsened the conditions of import of raw materials for the industries. At the other end of the chain, manufacturers are facing pressure from retailers to hold the adjustment in prices, at a time when consumers with less disposable income, reduce their purchases.
According to data from the Nielsen consulting, sales of olive oil in the country showed growth of 2.6% in volume last year to 56.8 million liters, and high of 6.3% in nominal value, R$ generated 1.48 billion. The average sale price reached $ 26 per liter, compared with 25.08 R$ in 2014. The category represents 4.8% of the total market of vegetable oils. The vegetable oils market grew by 1% in volume last year and 3.8% in revenue.
The Gallo Brazil, owner of a market share of 30%, reported that sales have stabilised in 2015, after growing around 17% a year in the five previous years. For Walter Celli, Vice-President of Brazil, Gallo deceleration is a reflection of the economic crisis. "The consumption in Brazil is still restricted. I believe that this market can still grow 50% in the next five years, "said Celli. For 2016, the Commission estimates that the company will maintain its market share, following the performance of the category. "The market may grow a little or drop a little, depending on the current scenario," he said.
The Gomes da Costa, who represents the Spanish brand Carbonell in Brazil, reported that its sales grew between 3% and 4% in 2015, with a loss in the sales pace in the second half. "International prices have gone up a lot because of crop failure in Europe. The impact in Brazil was higher because of the devaluation of the real, "said Luiz Manglano, marketing manager of Gomes da Costa.
The olive oil sold in Brazil is imported mainly from Europe. The Garza reported that it expects for this year a small drop in the oil market and growth between 1% and 2% in sales of Carbonell. The increase will be achieved by expanding the distribution network, and some competitors output lines imported from market. "Companies face difficulties to pass the increase in retail costs, trading became more complicated," said Manglano. According to the Executive, the average price of imported oil rose 45% in the last year.
Fernanda Gomes Correa, Nielsen''s Service Manager, says as a category still small in the segment of vegetable oils and be consumed primarily by people with higher income, the oil undergoes less the impact of the economic crisis. "Brands to lower prices make more space as consumers with financial restrictions seek to balance the budget," says Fernanda. She considers likely replacement in the coming months, part of the consumption of olive oil for vegetable oils such as canola and soy.
Robson Munhoz, Director of retail and industry relationship Neogrid, said that replacing already has happened in retailers. In November 2015, the level of disruption in retail (which measures the lack of products) reached 16.69%. In December, the index returned to 13.08%. "Retailers have been holding shopping, due to the prospect of recession and the rise in prices of industries. This generates a rupture, "said Munhoz.
The consultancy Euromonitor International estimates that the oil market has moved 85.6 million litres in 2015 and generated revenues of $ 791 million. For the period 2015 to 2020, the consultancy projects for the annual average growth of 5.4% in volume and 7.1% in revenue. Between 2010 and 2014, the average annual growth rate was 12.7 percent in volume and 21.1% in revenue.