Spain lifts sunflower oil warning, olive oil rises
MADRID, April 28 (Reuters) - Spain on Monday lifted a blanket health warning on consuming sunflower oil but kept Ukrainian oil off the market following the discovery of a contaminated batch last week, officials said.
All sunflower oil was withdrawn from the market on Friday as a precautionary measure by the health ministry after a batch from Ukraine -- Spain's main supplier -- was found to have traces of aliphatic hydrocarbons.
"There wasn't time to look at whether oil came from Ukraine or not. As of today, shops are restocking with oil from other origins," a Food Safety Agency official said, who asked not to be identified.
The official said the agency was tracking down which Ukrainian oil was contaminated, after which all oil from Ukraine would be allowed back on the market.
"That'll take a bit longer. Maybe a few days," the official said.
Trade ministry data show Spain imported 282,000 tonnes of sunflower oil from Ukraine last year, of which 194,000 came from Ukraine.
Spanish food company SOS Cuetara (SOS.MC) earlier on Monday said it sent non-Ukrainian sunflower oil to all its distributors and said Friday's warning would not have a significant effect on sales of the product.
"In any event, a switch in consumption may come about to olive oil, in which Grupo SOS is the clear market leader," it added in a statement.
OLIVE OIL BUOYANT
Spain is the world's leading producer of olive oil and harvested 1.1 million tonnes in the crop year ending November 2007. Growers hope to produce 1.2-1.3 million this year.
Olive oil futures were buoyant after more than a month of steady declines amid optimistic forecasts for the coming harvest and abundant carryover stocks from the last campaign.
Refined oil <0#EUOLIVEOIL-SP> traded up 50.18 euros, or 2.1 percent, to 2,394.13 euros a tonne on the MFAO exchange in southern Spanish town Jaen.
"The market is very sensitive to oil consumption trends and now is a good time for producers to try and make up for the recent slump, which has been worrying them," said Nieves Ortega, editor of olive oil trade magazine Oleo.
"But I don't think the rally will be sustained, due to what looks like being a bumper harvest and hefty stocks."
Ortega doubted sunflower oil consumption would drop permanently as it did with olive pomace oil, following a health scare in 2001.
Oil safety issues have had a turbulent history in Spain.
Contaminated rapeseed oil was blamed for the death of 1,200 people in 1981 in Spain's worst food poisoning epidemic. Victims and their families were still claiming compensation and holding demonstrations 20 years later.
(Reporting by Martin Roberts; editing by Chris Johnson)
