Olive Oil Trade Between Spain And China:Competitiveness And Consumer Behaviour

Olive oil is the most typical ingredient of the Mediterranean diet which is world renowned for its beneficial properties as well as olive oil itself whose healthy properties are scientifically proven. This diet has its origins in the Mediterranean countries and among them Spain leads the world production of olive oil and its international commercialisation.In recent decades China has been growing economically year after year with ratio values around10%annually. This economic development had a key point early in the century (2001) when China entered the World Trade Organization (WTO) and goes together with an increasing search of high quality products by the Chinese consumers. Since then trade of olive oil in China has grown gradually in the early years and dramatically since2005/2006. Domestic production is very small due to the special characteristics required for the cultivation of olive trees and is not expected to increase significantly in the coming years. Therefore, the consumption of olive oil in China is dependent on exports from Mediterranean and non Mediterranean countries and, among them all, Spain stands out.This thesis attempts to study the role that Spain plays in international trade in olive oil in China, also the current situation of China with respect to this product, especially from the point of view of domestic consumption and the competitors of Spain on this product both at global trade level and specifically in China. For that purpose the global market situation is studied from the point of view of production, consumption and export where Spain leads production and exports and is the second country in consumption. With respect to competitors of Spain we analyze which countries in the world have competitive advantage in trade in olive oil according to the criterion of Revealed Comparative Advantage (RCA), analyze the12countries that meet this criterion and also study the influence of these countries in trade in olive oil in China which will show that the main competitor of Spain is basically Italy, and in lesser extent Greece and Australia that despite not having RCA at global level it has the fourth largest market share in virgin olive oil in China. It is also studied the point of view of the Chinese consumer in regard to olive oil by means of surveys conducted in China. The collection data of the survey took place at the end of2013and the data used for the calculation of RCA are extracted from FAO and UNcomtrade and range from2000to2011.The results shows that olive oil is a product still unknown by a significant number of consumers in different aspects such as existence (awareness of the product) and uses (the proportion of consumers that associate the olive oil to cosmetic rather than to an edible product is significant). No drastic changes are expected in the current leading role of Spain, followed closely by Italy, and at a lower market share but still relevant Greece and Australia.