The EU demand for imports of virgin olive oil

This paper has analysed the import demand for virgin olive oil in the EU andmore precisely in the Italian market, as it concentrates more than 80% of EU imports,aiming to determine the relative position of Mediterranean EU and non-EU countriesexports and their degree of substitutability or complementarity. The methodology usedis based on the specification of a Threshold Almost Ideal Demand System in whichspecial attention has been paid to the stochastic properties of the series involved. In anempirical context, the paper has aimed to provide a set of import demand elasticitiesthat can be useful in trade models. Results point to Spain as the leader in the Italianvirgin olive oil market. It is expected that this position will be maintained in the future.Greece has improved its relative position after its accession into the EU. However,imports coming from Greece are highly dependent on the situation in Spain. Tunisiahas good potential for future exports development as a consequence of newperspectives of trade liberalisation taking into account its relative position in the Italianmarket, in spite that its exports are currently constrained due to existing quotas.