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Olive Oil Production, Exports Smash Records in Uruguay

In 2019, Uruguay quadrupled its olive oil production relative to the previous year. As trees come into maturity, production is likely to continue trending upwards.

Plaza Independencia, Montevideo.
Jan. 10, 2020
By Daniel Dawson
Plaza Independencia, Montevideo.

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Olive oil pro­duc­ers in Uruguay enjoyed a record-set­ting har­vest in 2019, accord­ing to a new report com­piled by Uruguay’s Min­istry of Ranch­ing, Agri­cul­ture and Fish­ing.

The small South Amer­i­can coun­try pro­duced 2,775 tons of extra vir­gin olive oil, accord­ing to the report, an increase of more than 360 per­cent over the rolling five-year aver­age.

Uruguay has entered a new stage of its olive grow­ing because of the afore­men­tioned (tree cul­ti­va­tion). It has over­come the bar­rier of pro­duc­ing 1,000 tons of olive oil annu­ally.- Jorge Pereira, Uruguayan olive oil som­me­lier and con­sul­tant

The 2019 pro­duc­tive har­vest was much higher than the pre­vi­ous records and even exceeded the expec­ta­tions that the pro­duc­ers had,” the report said. Cli­matic con­di­tions allowed a very good flow­er­ing and con­se­quently a great quan­tity of fruit, with a good qual­ity of oil.”

In addi­tion to favor­able weather, Jorge Pereira, an Uruguayan olive oil som­me­lier and con­sul­tant, told Olive Oil Times many olive trees that had been planted last decade were just now begin­ning to bear fruit.

See more: Record Year for South Amer­i­cans at NYIOOC

The increase in cul­ti­vated area in the period of 2010 to 2019 has quin­tu­pled, and these new olive trees have entered pro­duc­tion,” he said.

Uruguay’s olive oil pro­duc­tion is also expected to con­tinue climb­ing. Pre­vi­ously, the pro­duc­tion ceil­ing sat at around 1,000 tons with off-year har­vests drop­ping to about 500 tons. Now, Pereira expects to see Uruguay pro­duc­ing a min­i­mum of 1,000 tons per year, even in off-years.

Uruguay has entered a new stage of its olive grow­ing because of the afore­men­tioned [tree cul­ti­va­tion],” he said. It has over­come the bar­rier of pro­duc­ing 1,000 tons of olive oil annu­ally, although it is also far from expected for the approx­i­mately three mil­lion olive trees planted in the coun­try.”

What con­tin­ues to influ­ence [the har­vests] are sea­sonal fac­tors such as alter­na­tion and cli­ma­tol­ogy,” Pereira added. 2020 by regional mete­o­ro­log­i­cal phe­nom­ena, espe­cially the low win­ter tem­per­a­tures when flow­er­ing begins, will have a sig­nif­i­cantly lower pro­duc­tion, but with that min­i­mum of 1,000 tons.”



As pro­duc­tion in the small South Amer­i­can coun­try – which is home to just under 3.5 mil­lion peo­ple and 22,500 acres of olive trees – has increased, so have exports. The Min­istry of Ranch­ing, Agri­cul­ture and Fish­ing reported that exports approached 1,000 tons and gen­er­ated rev­enue of $2.5 mil­lion.

Spain led the way as the largest des­ti­na­tion for Uruguayan olive oil, with about 71 per­cent of the coun­try’s exports headed across the Atlantic to the Iber­ian Penin­sula. The United States (24 per­cent), Brazil (four per­cent) and China (0.5 per­cent) were the four next largest des­ti­na­tions.

Pereira said that exports would con­tinue to grow along with pro­duc­tion. Domes­tic con­sump­tion in Uruguay remains quite low – about 500 mil­li­liters per per­son per year – so Pereira views grow­ing exports as nec­es­sary for the sur­vival of the country’s 147 pro­duc­ers.

The recently signed Euro­pean Union-Mer­co­sur free trade agree­ment will pro­vide Uruguayan exporters tar­iff free access to all 28 mem­bers of the E.U., when it comes into force in the next few years. In addi­tion to the already estab­lished mar­ket of Spain, Uruguayan exporters will also have the oppor­tu­nity to export to north­ern Euro­pean coun­tries, where demand for olive oil is grow­ing steadily.

The threat of more Amer­i­can tar­iffs on Span­ish olive oil imports will also leave the world’s third largest olive oil con­sum­ing coun­try in need of sourc­ing new imports, with dis­trib­u­tors in the coun­try already look­ing south to neigh­bor­ing Argentina.

Both of these inter­na­tional devel­op­ments present oppor­tu­ni­ties for Uruguayan pro­duc­ers to con­tinue estab­lish­ing them­selves in the country’s two largest olive oil export mar­kets.

How­ever, Brazil and China may present the best oppor­tu­nity for Uruguayan pro­duc­ers. Both coun­tries pay sub­stan­tially more for Uruguayan olive oils. Brazil pays an aver­age of $6,376 per ton while China pays $8,258 per ton. By con­trast, Spain and the United States pay con­sid­er­ably less: $2,516 and $1,908 per ton, respec­tively.

Due to its prox­im­ity and unre­stricted access, Pereira believes that the rapidly grow­ing Brazil­ian mar­ket will become the most impor­tant one for Uruguayan exporters.

In the short term the large mar­ket that can change this rela­tion­ship in exports is Brazil, which demands 80,000 tons per year of olive oil, he said. Due to geo­graph­i­cal prox­im­ity, attrac­tive prices and non-exis­tent cus­toms tar­iffs, it will become an increas­ingly sig­nif­i­cant des­ti­na­tion.”

As exports have grown, imports appear to be declin­ing. The Min­istry of Ranch­ing, Agri­cul­ture and Fish­ing said that from Jan­u­ary to Octo­ber, imports hit a five-year low.

Offi­cials from the Uruguayan Olive Asso­ci­a­tion would like this fig­ure to con­tinue decreas­ing and have started to pro­mote domes­tic oils. How­ever, con­sumer pref­er­ences for imported olive oils remains quite strong.

The pro­duc­tive sec­tor has not been able to coun­ter­act the com­pe­ti­tion of for­eign oils or increase domes­tic con­sump­tion.” Pereira said. The lack of national poli­cies to value Uruguayan olive oil and pro­mote con­sump­tion are pend­ing tasks.”

My assess­ment is based on the fact that 2019 was a year that the coun­try could have achieved the self-suf­fi­ciency of olive oil con­sump­tion,” he added. How­ever, Uruguay mainly imported olive oil from Argentina [and Spain] at prices that are dou­ble what it obtains from exports.”





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