Longnan Emerges as China’s Fastest-Growing Olive Oil Hub

Summary

The arti­cle dis­cusses the growth of China’s olive oil indus­try in Longnan, Gansu province, which is home to the coun­try’s largest olive groves and mills. The region’s olive indus­try gen­er­ates bil­lions of Renminbi annu­ally, sup­ports hun­dreds of thou­sands of res­i­dents, and faces chal­lenges such as drought, infra­struc­ture, and com­pe­ti­tion from imports.

This is the third in a series of reports on the evo­lu­tion of China’s olive oil indus­try.

LONGNAN, China – After leav­ing the indus­trial city of Guangyuan and pass­ing through small vil­lages and tun­nels cut deep into the hills, the scenery shifts. Two and a half hours later, the train rolls into a drier val­ley: Longnan, often described as China’s answer to Jaén.

Located in Gansu province, which has 1.17 mil­lion mu (78,300 hectares) of olive groves — 56 per­cent of the country’s total — Longnan is home to China’s largest mills and a rapidly expand­ing olive sec­tor.

The city of 2.5 mil­lion peo­ple stretches along the curves of the Bailong River. Olive trees line parks, medi­ans, road­sides and the steep ter­races sur­round­ing the val­ley.

According to Bai Xiaoyong, chair­man of Longnan Tianyuan Olive Company and sec­re­tary-gen­eral of the olive sec­tion of the China National Non-Timber Forest Products Association, the region’s boom began in 1975.

“In Wudu dis­trict, we received suc­cess­ful results after the first plant­ing in the mid-1960s failed to bear fruit,” he said. ​“Since then, olive cul­ti­va­tion has spread across China in a sec­ond wave.”

Low humid­ity, scarce rain­fall, ample sun and steep ter­rain have helped olive groves flour­ish for 50 years, earn­ing Longnan the nick­name ​“the home­town of Chinese olives.”

Tens of thou­sands of hectares of trees occupy ter­races high above the val­ley and fill nearly every spare plot of land across the city.

“The olive crop is used to alle­vi­ate poverty,” Xiaoyong said.

Mills pay farm­ers a fixed price of 7 Renminbi (€0.85) per kilo­gram this year. One mill man­ager said that before the gov­ern­ment set a floor price, farm­ers earned about 3 Renminbi (€0.36), mak­ing the crop unvi­able.

“We make sure prices do not fall below 3 Renminbi per kilo­gram,” another mill oper­a­tor said.

A for­mer finance min­istry offi­cial told Olive Oil Times that max­i­miz­ing yields is not the sector’s pri­mary goal. Instead, the focus is on redis­trib­ut­ing state funds to rural areas and ​“pro­mot­ing sus­tain­able devel­op­ment.”

Official data show that Longnan’s olive indus­try gen­er­ates 4 bil­lion Renminbi (€485 mil­lion) annu­ally and sup­ports more than 400,000 res­i­dents.

During har­vest, pick­ers set out at dawn, rid­ing motor­bikes up nar­row moun­tain roads. With hand rakes, bas­kets and lad­ders, they work tree by tree across the ter­races.

Many of the older orchards were never prop­erly pruned. Trees now stand three to four meters high, slow­ing hand har­vest and requir­ing teams of five or six work­ers to clear a sin­gle ter­race.

Once com­plete, bas­kets are emp­tied into bins and loaded onto small trucks for trans­port to mills on the city’s edge.

Most farm­ers belong to one of China’s few grow­ers’ coop­er­a­tives, sup­ply­ing all major mills, includ­ing award-win­ning Olive Times.

Owner Li Gang expects pro­duc­tion to rise 20 per­cent this year, with yields reach­ing 700 to 1,000 met­ric tons.

“The yield of the trees has been increas­ing steadily,” he said. ​“The plant­ing area is also increas­ing.”

Longnan’s arid cli­mate sup­ports higher yields but increases drought risk. ​“In response to drought, we extract snowmelt from the Bailong River for irri­ga­tion,” Gang said. Hail, he added, is another per­sis­tent con­cern.

Local offi­cials said regional and cen­tral author­i­ties plan to invest 8.33 bil­lion Renminbi (€1.01 bil­lion) in reser­voirs, canals and other infra­struc­ture to irri­gate 720,000 mu (48,000 hectares) of olive groves.

“With irri­ga­tion, yields per mu could rise from 200 – 300 kilo­grams to 700 – 1,000 kilo­grams,” a local offi­cial said. ​“This would raise per-mu value by 2,000 to 4,000 Renminbi (€245 to €485) and sig­nif­i­cantly boost farm­ers’ incomes.”

Beyond drought, offi­cials pointed to weak infra­struc­ture and high pro­duc­tion costs. ​“Roads, elec­tric­ity and irri­ga­tion sys­tems are under­de­vel­oped. Logistics are dif­fi­cult,” the offi­cial said. ​“Fresh olives must be processed the same day, and trans­port bot­tle­necks restrict devel­op­ment.”

Early plant­i­ngs also resulted in many low-yield­ing orchards. Domestic pro­duc­ers face tough com­pe­ti­tion from imports, lim­ited tech­no­log­i­cal inno­va­tion and brand­ing chal­lenges.

“The region lacks a uni­fied pub­lic brand,” the offi­cial said. ​“Companies oper­ate inde­pen­dently with lim­ited impact, cre­at­ing dis­or­dered com­pe­ti­tion and price con­fu­sion despite pro­duc­ing higher-qual­ity oil than imports.”

To illus­trate, I sit in the offices of Jianuidai China Co-Op, south of Longnan. Four plas­tic cups are lined up before me — three con­tain­ing imported brands com­mon in China. Based on my IOC-cer­ti­fied tast­ing train­ing, all three exhibit clear defects. The least flawed might qual­ify as vir­gin, with fusti­ness reg­is­ter­ing at about a two.

By con­trast, the oil made just 100 meters away is unmis­tak­ably extra vir­gin, though mild and pro­duced from a mix of green and ripe fruit.

Gang said that improv­ing Chinese con­sumers’ appre­ci­a­tion of olive oil remains slow work.

“The mar­ket is volatile, but con­sump­tion has risen steadily since 2018,” he said.

Olive Times sells nearly all its oil on the open mar­ket and does not par­tic­i­pate in state-owned enter­prise dis­tri­b­u­tion chan­nels.

The com­pany has invested heav­ily in edu­cat­ing con­sumers about local extra vir­gin olive oil and sees grad­ual progress.

Gang believes that as pro­duc­tion increases, more con­sumers will taste the dif­fer­ence between local oils and many imported prod­ucts. He expects this will strengthen trust in domes­tic pro­duc­tion.

“Chinese con­sumers’ abil­ity to appre­ci­ate olive oil is improv­ing,” he said. ​“We believe these infe­rior olive oils will even­tu­ally be replaced in the mar­ket.”