Coronavirus Crisis Hits Small Producers Hardest in Portugal

Domestic consumption has dried up as restaurants close and hotel rooms sit empty. Exports have also dropped as countries around the world cancel their orders for Portuguese oil.

Monte dos Valhascos - Amareleja (OOT Archive)
Apr. 24, 2020
By Pablo Esparza
Monte dos Valhascos - Amareleja (OOT Archive)

Recent News

We are feel­ing the cri­sis’ impact and we are going to feel it more,” Mariana Teles Branco, mar­ket­ing and qual­ity tech­ni­cian of the Center for the Study and Promotion of Alentejo Olive Oils (CEPAAL), told Olive Oil Times.

Like nearly every other coun­try in the world, Portugal is being struck by the coro­n­avirus pan­demic and the country’s vibrant olive oil sec­tor has not been spared from its neg­a­tive con­se­quences.

The clo­sure of restau­rants, hotels and small shops is hav­ing an impact. Those are impor­tant buy­ers at a national level and much of the olive oil won’t be sold because that chan­nel has been inter­rupted.- Mariana Teles Branco, mar­ket­ing and qual­ity tech­ni­cian at CEPAAL

The effect of the dis­ease in the Iberian coun­try, how­ever, has so far been lower than in most of its European neigh­bors.

As to April 22, there were 21,379 COVID-19 cases and 762 deaths in Portugal, a rate of around seven deaths for every 100,000 peo­ple in a coun­try with a pop­u­la­tion of lit­tle more than 10 mil­lion.

These data show a stark con­trast with those of Spain, which has a rate of about 45 deaths for every 100,000; Italy, with a rate of roughly 40 fatal­i­ties per 100,000; and France, with a rate of 30 deaths for every 100,000.

Advertisement
See more: COVID-19 Updates

According to experts, the rel­a­tively early reac­tion of the Portuguese gov­ern­ment has been cru­cial in order to slow down the spread of the dis­ease.

Portugal was placed under a state of alert on March 13th and then under an even stricter state of emer­gency just five days later. At that moment, there were just three deaths due to the new coro­n­avirus and 785 reported cases in the coun­try. When Spain took sim­i­lar mea­sures, they already had 84 deaths.

For more than a month, Portugal has been liv­ing under a gen­eral lock­down, which, in prac­ti­cal terms, means that only strictly essen­tial move­ments – such as buy­ing food or med­i­cines and prac­tic­ing sports for short peri­ods of time – are allowed.

The country’s only land bor­der with Spain is closed, all classes are sus­pended, bars, clubs and restau­rants are shut­tered, and mas­sive events are can­celed.

This abnor­mal sit­u­a­tion is hav­ing an impact on the country’s econ­omy.

According to the lat­est IMF fore­cast, the Portuguese GDP may decrease by eight per­cent, the high­est rate on record, as unem­ploy­ment is expected to grow from 6.5 per­cent in 2019 to over 13.9 per­cent in 2020.

While the coun­try’s upcom­ing har­vest is unlikely to be greatly impacted, the cri­sis is tak­ing its toll on olive oil pro­duc­ers across the coun­try.

In terms of pro­duc­tion, it won’t have such a big effect as all this started when the cam­paign was fin­ished,” Teles Branco said. In that regard, the most impor­tant thing now is to make sure that, ahead of the 2020/21 cam­paign, olive oil pro­duc­ers have all they need to take care of their trees and that, when the moment comes, the har­vest is done in the best pos­si­ble way.”

Portugal is cur­rently the world’s ninth-largest pro­ducer of olive oil. This year, pro­duc­ers recorded a har­vest of 125,400 tons, the sec­ond-high­est total in the coun­try’s his­tory, and a recent study sug­gests that Portugal has the poten­tial to become the third-largest pro­ducer in the world by 2030.

Around 71 per­cent of the country’s pro­duc­tion comes from the Alentejo region.

Internal con­sump­tion is one of the key pil­lars of the coun­try’s olive oil sec­tor. The Iberian coun­try ranks fourth in annual olive oil con­sump­tion, after Greece, Spain and Italy with 7.8 liters per capita, up from 2.6 at the begin­ning of the 1990s, accord­ing to data pro­vided by Casa do Azeite, Portugal’s Olive Oil Association.

At the begin­ning of the cri­sis olive oil con­sump­tion grew as it was seen as an essen­tial and durable prod­uct, but I believe that trend is revers­ing,” Teles Branco said.

The clo­sure of restau­rants, hotels and small shops is hav­ing an impact,” she explained. Those are impor­tant buy­ers at a national level and much of the olive oil won’t be sold because that chan­nel has been inter­rupted. Small pro­duc­ers are expe­ri­enc­ing a very neg­a­tive effect. Big pro­duc­ers, who are able to sell in super­mar­kets, may cope bet­ter with the sit­u­a­tion.”

Francisco Pavão, the pres­i­dent of the Association of Protected Designation of Origin Producers of Trás-os-Montes and Alto Douro (APPITAD), described a pic­ture in that north­east­ern region.

Small pro­duc­ers in Trás-os-Montes are vir­tu­ally not sell­ing any­thing,” he told Olive Oil Times. They depend on restau­rants and shops retail­ing qual­ity local prod­ucts in tourist cities, such as Porto and Lisbon. The sit­u­a­tion for them is dra­matic. Cooperatives work­ing with large super­mar­kets increased their sales dur­ing the first weeks of the lock­down, but they also suf­fer the slow­down of the inter­na­tional mar­kets, espe­cially the Brazilian one.”

Magna Olea is a small pro­ducer near Mirandela, in Trás-os-Montes, the sec­ond-largest olive oil-pro­duc­ing region in the coun­try, where the share of tra­di­tional pro­duc­ers is larger than in Alentejo.

Maria do Pilar de Abreu e Lima, one of its own­ers, told Olive Oil Times how they are deal­ing with the cur­rent sit­u­a­tion.

Our busi­ness has prac­ti­cally stopped,” she said. We are not hav­ing many orders at this moment, but I think those who are hav­ing more prob­lems are the ones who have work­ers and salaries to pay. We are a small, qual­ity pro­ducer and we don’t have any employ­ees.”

We are tak­ing this oppor­tu­nity to try to start new busi­ness lines in the United Kingdom and Germany,” she added. Also, we are sup­port­ing the chefs we work with as restau­rants are also fac­ing tough times. We try to use dig­i­tal chan­nels to share recipes and to pro­mote the use of olive oil.”

Portuguese olive oil exports are also suf­fer­ing the mobil­ity restric­tions at an inter­na­tional level. The country’s vol­ume of olive oil exports more than tripled in the last 10 years, grow­ing from 51,774 tons in 2010 to 158,688 in 2019, accord­ing to Casa do Azeite. Brazil makes up around 38 per­cent of that trade.

Exports have also received a bru­tal impact,” Teles Branco said. Unlike the pro­duc­ing coun­tries, many import­ing ones don’t regard olive oil as a basic prod­uct but as a lux­ury one. Many inter­na­tional orders have been can­celed.”

We have to change that men­tal­ity and pro­mote olive oil so it is seen as an essen­tial prod­uct in non-pro­duc­ing coun­tries. We have an oppor­tu­nity to pro­mote the health ben­e­fits of olive oil and to teach new uses of this prod­uct at home,” she added.

Pavão shares the con­clu­sion that a com­mu­ni­ca­tion effort, both at an inter­na­tional and national level, will be key for the future of the olive oil sec­tor in Portugal.

Now we need to reach to our cus­tomers’ homes,” he said. Internationally, we need to invest in the pro­mo­tion of olive oil as the basis of the Mediterranean diet. We have to talk about its ben­e­fits for health and also about how impor­tant olive oil pro­duc­tion is for our ter­ri­to­ries and our cul­ture.”





Related News