Did a post a bit over a year ago on the price of Greek olive oil in USD terms here.
Price last year was $60 while today it is up to $65 so this is indicative that the Greek olive oil producers have been able to achieve a bit better real terms of trade in USD terms over the last year. Perhaps some indirect benefit of the very significant reduction in petroleum/products since we last looked at this price.
EUR/USD was about at the same level on the two dates in question so this is a nice get for the Greek olive oil people.
Last year:
This year:
10 comments:
Suggests higher EURUSD exchange rates.
Well Mike I think the EZ probably gave some terms up somewhere else... and a bigger market than olive oil... EUR/USD is almost unchanged on the two dates... and idk when the olive oil people were able to get this increase in I wasnt watching it continuously....
So the olive oil people were able to get an albeit small increase..
Seeing perhaps the same type of thing here in US lately...
Food is way down but I am seeing some very recent decent increases in some other areas of industrial products...
Perhaps food being a big petroleum user, with the petrol collapse the food industry is passing on a lot of the savings finally...
Olive oil is kind of a niche product... high end product... as opposed to corn/soy/wheat and the typical livestocks of beef/pork/chicken... might not use that much petrol relatively so they were able to get a bit of an increase with leading flows staying about the same...
Flows are constant but petro is way down so that opens up a lot of spending to go after now in all the other areas than petro...
That or this bacterial infection has reduced supply.
http://www.bbc.com/news/world-europe-32031233
David, I do not believe in "supply & demand"... its basically monetarist...
The flows you mention are spending on household consumption, which are less on fuel so can be more on olive oil?
Wouldn't this still be a case of relative pricing driving substitution just interacting with a supply shock?
Link to theory that supply & demand are basically monetarist?
"The flows you mention are spending on household consumption, which are less on fuel so can be more on olive oil?" Yes
I'm thinking that Greek Olive oil producers have gained some pricing power due to the drop in petroleum prices.. iow people are spending less for petroleum prices so they have more to spend on this special food product... so the olive oil people are able to get a small price increase to stick...
"Wouldn't this still be a case of relative pricing driving substitution just interacting with a supply shock?
Link to theory that supply & demand are basically monetarist?"
My own theory I'm testing based on the MMT insight "its about PRICE not quantity..." but I am trying to apply this insight consistently...
This gets back to Tom's table pounding on the concept of "power"... prices are set (ie DETERMINED..) by people who have the "power" or "authority" to set them and IN ALL CASES...
iow I'm trying not to look at it (price) as some sort of stochastic outcome based on QUANTITY of "supply" and "demand" ...
eg you go to Home Depot and plywood is $14 and get gas on the way for $2.50 and then two weeks later, a hurricane is bearing down and you are in the cone so you go to Home Depot to buy some plywood and the place is jammed and they are running out BUT plywood is still $14... meanwhile gas is up to $3.00...
So obviously "supply and demand" is all false....
I'd agree price has a power component.
The case of Home Depot re hurricane we have monopoly power 'failing' to price gouge when opportunity presents itself due to lack of supply and increased demand.
I see you point re: monopoly price setters but to see absolute monopoly or monopsony power in ALL CASES might be unhelpful. Monopoly and monopsony pricing power, it seems can be helped by an 'act of God'. To miss market power in pricing does seem to be the bigger problem today and probably should be first focus.
Price gouging during an emergency like a hurricane is illegal in many jurisdictions. Also bad business practice unless you want to destroy your customer base.
This is sounding like a variation of the 'animal spirits' explanation. Olive oil producers sensing that customers are feeling more optimistic and consequently less frugal.
"It will cost fans more to watch the Orioles play at Camden Yards this upcoming season.
The Orioles will raise ticket prices for 2016 on both season-ticket plans and single-game sales, according to a club official.
Season-ticket holders will see an average price increase of $5 per game with the increase ranging from $3 to $10 per ticket based on the plan and selected games, according to a club official."
http://www.baltimoresun.com/sports/bal-orioles-to-increase-ticket-prices-for-2016-season-20160209-story.html
They didnt near sell out every game last year...
People try to raise prices and see how it goes... olive oil people over there probably got one to stick... maybe they blamed it on the virus/bacteria.... but it looks like they got a less than 10% price increase to stick and have realized a small increase in USD terms....
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