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Portugal May Be the Third-largest Olive Oil Producer by 2030

Investments in high-density groves and modern mills are driving Portugal's rise among olive oil producers.

Esporao
Jan. 2, 2020
By Daniel Dawson
Esporao

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Portugal has the poten­tial to be the third-largest pro­ducer of olive oil in the next ten years, accord­ing to a study pre­sented last month.

Alentejo: Leading the International Modern Olive Industry was pre­sented at the sixth edi­tion of Olivum days. In the 107-page report, researchers from Consulai and Juan Vilar Strategic Consultants said modern, high-den­sity groves and invest­ments in tech­nol­ogy are paving the way for the country’s rise among olive oil pro­duc­ers.

“With the expected growth over the next ten years, Portugal will be the largest ref­er­ence in modern and effi­cient olive grow­ing in the world, and pos­si­bly the sev­enth-largest in sur­face area, and the third-largest in world olive oil pro­duc­tion,” the authors of the study wrote.

Portuguese olive groves have under­gone a pro­found trans­for­ma­tion from a tra­di­tional and non-com­pet­i­tive to a modern and effi­cient.- Consultai and Juan Vilar Strategic Consultants

Portugal is cur­rently the world’s ninth-largest pro­ducer of olive oil. This year, pro­duc­ers in the coun­try are expect­ing a record-har­vest of 140,000 tons.

Leading the way in Portugal’s charge to the top is the south­ern region of Alentejo.

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Stretching from the Atlantic Ocean to the Spanish border, Alentejo takes up roughly a quar­ter of the country’s land­mass and is respon­si­ble for slightly more than three-quar­ters of all Portugal’s olive oil pro­duc­tion.

See more: Olive Oil Production News

“[In the last 20 years,] Portuguese olive groves have under­gone a pro­found trans­for­ma­tion: from a tra­di­tional and non-com­pet­i­tive olive grove to a modern and effi­cient olive grove,” the authors of the study wrote. “Alentejo led the cur­rent trans­for­ma­tion of inter­na­tional olive grow­ing.”

Back in 1999, 98 per­cent of olive groves in Alentejo were tra­di­tional. The olive trees in tra­di­tional groves are more spaced out than in inten­sive or super-inten­sive groves and machines are not used to har­vest the fruits.

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Traditional pro­duc­ers in the region tend to have fewer than 250 trees per acre, while super-inten­sive pro­duc­ers usu­ally have at least 1,000.

The aver­age yield from tra­di­tional groves in Alentejo was about 7.5 tons per acre. However, in the super-inten­sive groves, yields were between 24.7 and 29.7 tons per acre. This caused annual pro­duc­tion in the province to increase by more than 1,000 per­cent in less than 20 years, rising from 8,534 tons in 1999 to 97,004 tons in 2017.

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Super-inten­sive groves now make up about 63 per­cent of all olive groves in Portugal. As more groves are con­verted from tra­di­tional to super-inten­sive, Portugal’s olive oil pro­duc­tion is fore­cast to con­tinue climb­ing.

“Over the last few years we have seen a very strong evo­lu­tion of olive grove pro­duc­tiv­ity in Alentejo,” the researchers wrote. “However, it is expected that cur­rent levels of olive pro­duc­tiv­ity in the Alentejo can con­tinue to increase as tra­di­tional olive groves are con­verted.”

Part of what has led to this pro­duc­tion boom was the con­struc­tion of the Alqueva dam, which has allowed super-inten­sive groves to pro­lif­er­ate. Prior to the con­struc­tion of the dam, only tra­di­tional groves could sur­vive in the region due to the preva­lence of drought and wild­fires.

Another dri­ving factor has been the mod­ern­iza­tion of the country’s olive oil mills. As olive oil yields have con­tin­ued to trend upwards, the number of mills in Portugal has steadily declined. Small tra­di­tional mills have quickly been replaced by larger, more modern ones.

“The region has invested in modern and effi­cient pro­duc­tion processes which have sig­nif­i­cantly increased pro­duc­tiv­ity, and invested in the instal­la­tion of oil mills that are some of the most devel­oped in the world,” the researchers wrote. “This has allowed Portugal to sig­nif­i­cantly improve the qual­ity of its olive oils.”

The researchers also high­lighted how the mod­ern­iza­tion and invest­ment in Alentejo and Portugals’ olive groves have ben­e­fited the country’s econ­omy. In the last three years, olive oil pro­duc­tion in Portugal has gen­er­ated a turnover of €620 mil­lion ($690 mil­lion), which is 2.5 times higher than the turnover recorded between 2010 and 2012.

Portugal’s olive oil exports have also grown rapidly and the researchers believe this trend will con­tinue as more invest­ments are made in high-den­sity groves and modern mills. In 2017, Portugal exported €500 mil­lion ($555 mil­lion) of olive oil, making it the fifth-largest exporter of the prod­uct by value.

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Overall, earn­ings from olive oil now make up nine per­cent of the value of all of Portugal’s annual agri­cul­tural pro­duc­tion.

The researchers also said that the growth of the sector has cre­ated steady employ­ment and invest­ment in both Alentejo as well as the rest of Portugal, some­thing that had been severely lack­ing prior to the con­struc­tion of the Alqueva dam.

However, not every­one is cel­e­brat­ing the mete­oric rise of Portugal’s olive oil pro­duc­tion. Many tra­di­tional farm­ers, who either cannot afford to invest in super-inten­sive groves or do not want to, say their oils are being out­com­peted and, as a result, their way of life is slowly begin­ning to dis­ap­pear.

“Some old farm­ers are aban­don­ing their olive groves because they don’t earn enough to pro­duce the olives in the old groves,” Ana Carrilho, a local olive oil pro­ducer and the direc­tor of the Center for the Study and Promotion of Alentejo Olive Oils (CEPAAL), told Olive Oil Times. “Some of them have aban­doned their groves, while others sell their land to the bigger com­pa­nies.”

Carrilho added that since super-inten­sive groves oper­ate with lower pro­duc­tion costs per kilo­gram of oil pro­duced, they can greatly reduce their prices; a luxury that tra­di­tional pro­duc­ers do not enjoy.

Still, the researchers and Carrilho believe that the mod­ern­iza­tion of Portugal’s olive groves will con­tinue to ben­e­fit the entire sector, espe­cially as locals begin to take the reigns.

“The Spanish were the main dri­vers of the first phase of modern olive groves in the region,” the researchers wrote. “[But] with the expan­sion of the Alqueva irri­ga­tion and the increased expe­ri­ence of those in the region, invest­ment is now led by local entre­pre­neurs.”