Could China Rival Spain as World Olive Oil Capital?

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By Julie Butler
Olive Oil Times Contributor | Reporting from Barcelona

Could China Rival Spain as World Olive Oil Capital? | Olive Oil Times
An olive farm in Kumming China (Photo: Denise Lai)

Cheap labor costs and access to water plus ambitious expansion plans could see China threaten Spain’s status as the world’s leading olive oil producer within a decade, says a major Spanish newspaper.

Under the headline “China launches into producing its own olive oil”, El Mundo reported that in just a few years the Asian giant could have about 59 million olive trees in full production – up 50 percent on its current 39 million spread over 136,000 hectares – matching the plantation area of Jaén, the biggest olive oil producer region globally.

“China’s interest in producing olive oil is materializing now in such major plantations that in the not too distant future its emergence in international markets could be a commercial threat to Spain’s leadership,” the paper said.

“It’s estimated that in 10-12 years China could boast the world dominance in the olive oil market that Spain currently holds.”

China’s main competitive edge is cheap labor – equivalent to about €20 ($27) per person per month. It also has the key advantage of abundant water for its mountain-side plantations – such as in the provinces of Gansu, Sichuan and Shaanxi – thanks to ice thaw in spring.

For some years, Chinese agriculturalists and business people have visited Spain to learn how it make its icon products, such as olive oil.

China’s skill in reverse engineering has extended to another Spanish flagship – cured ham. A thwarted attempt by two Chinese companies to register the famous Jabugo name in China is said to have sent a shiver down Spain’s spine.

Olive oil and olive pomace oil imports into China grew 38 percent in 2011/12, according to the International Olive Council. Spain has been the main supplier but is now in the throes of a dismal harvest – looking to be well under half of last season’s record of 1.6 million tons.

Meanwhile, the latter could be Morocco, Tunisia and Turkey’s gain – Spanish and Italian bottlers are said to expect to ramp up their imports from these countries to cover Spain’s shortfall.

Ex-mill prices are still rising in Spain. The average weighted price for the week to January 12 was €2.86/t ($3.81/t), according to POOLred.


Sources:

El Mundo: “China launches into producing its own olive oil”, Jan 11, 2013
El País: “International competition threatens Andalusian olive oil leadership”, Dec 30, 2012
Jamón Serrano is now produced in… you guessed it: China


This article was last updated January 14, 2013 - 8:26 AM (GMT-5)

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  • Vera

    Just don’t see it happening.

  • suncomtech

    It is not true. The author doesn’t understand the Chinese olive industry very well.

  • suncomtech

    China starts to plant olive tree commercially since 1960s. However, there was no further development until recent 10 years. Most of Chinese area is not good for olive growth. You have to find the suitable micro climate area. There are some grower eslablising the successful olive farms, but we have to see in future years. It is too early to predict that China will over Spain in recent 10 – 20 years. I can hardly believe it. (Tony )

  • Michael Bradley

    Aside from the issue of quantity, there is the more interesting consideration of quality. China’s efforts to produce olive oil are likely to parallel similar forays they’ve made in grape cultivation for wine production. China will find, like California, Georgia and Texas, that producing decent olive oil is not simply a matter of planting olive trees. The trees can be pushed and coaxed but they have their unique way of answering. Spain has become the dominant producer of olives and olive oil not simply because the Spanish planted lots of trees. Farmers new to the olive oil business in the US have discovered that pushing trees by adopting the aggressive agro industry “Super High Density” farming method lowers costs and increases yield per acre, but the price paid in terms of loss in quality, is better described as a trade-off that experienced olive oil lovers find unacceptable. When it comes to olive oil, less if often more.

    • Patricia Darragh, COOC

      The California Olive Oil Council, established in 1992, provides a seal certification program which grades olive oil. The COOC also established the first olive oil sensory panel in North America. No differences in quality in the “super high density” farming method has ever been found. Not sure who the experienced olive oil lovers are but one can find excellent California extra virgin olive oils produced using a variety of methods.

  • Steve

    Spanish olive oil is garbage in terms of quality…..and Chinese olive oil will be no different. It is low quality oil…..for consumers that do not know better.

    • Carlos

      Sure, Spanish olive oil consummers do not know anything about their flagship product, nor do they appreciate the quality of a product with which they have lived almost everyday of their lives.

      Steve, please, could you inform us what your sources of information are to make such an stolid statement, share your wisdom with this uninformed consummer and producer of Spanish olive oil.

  • George

    “China’s main competitive edge is cheap labor – equivalent to about €20 ($27) per person per month.”

    RUBBISH. ABSOLUTELY RUBBISH. NOBODY IN CHINA IS GETTING THIS LOW LEVEL MONEY PER MONTH. NOBODY. MAYBE IN 1960 NOT NOW.