Olive oil pro­duc­tion dou­bled and exports grew by 155 per­cent in Argentina last year. Producers and gov­ern­ment offi­cials had expected a bull­ish year, but this level of growth exceeded their expec­ta­tions.

Olive oil pro­duced in Argentina can com­pete in qual­ity and price world­wide.- Alejandro Ovando, IES Consultores

“Last year we had an excel­lent sit­u­a­tion,” Frankie Gobbee, the co-founder and direc­tor of the Argentina Olive Group (AOG), told Olive Oil Times. He believes there was a per­fect storm that allowed pro­duc­ers to enter new export mar­kets and sell their oil for prices that were higher than nor­mal.

“We pro­duced a very high vol­ume of olive oil in Argentina and received good prices as well,” Gobbee said. “The Euro was also very high and all the major pro­duc­tion coun­tries [such as Spain and Italy] pro­duced lower vol­umes. These con­di­tions gave us a very excel­lent price for our oil and good oppor­tu­ni­ties to sup­ply a lot of new inter­na­tional accounts.”

Production in Argentina grew to a record-high 37,500 tons, of which more than 98 per­cent was vir­gin or extra vir­gin olive oil. Argentina has become the largest pro­ducer of olive oil in the Americas and the eighth largest pro­ducer in the world.

Francisco Corredoira, pres­i­dent of the Catamarqueña Olive Association (Asolcat), attrib­uted the increased out­put to tech­no­log­i­cal advance­ments and bet­ter grow­ing tech­niques.

“Today, olives des­tined for the pro­duc­tion of oil have to be machine-har­vested, in order to be prof­itable,” he said. Traditionally, pro­duc­ers could only grow 250 trees per acre, which were har­vested by hand. Now that fig­ure has risen to 865 trees per acre.

Exports by vol­ume grew to 30,000 tons and were out­paced by their growth in value, which reached US$152 mil­lion.

Néstor Roulet, the sec­re­tary of added value at the Argentinian Ministry of Agroindustries, said that the olive sec­tor has been grow­ing since 2016 and its most recent growth has been par­tially stim­u­lated by gov­ern­ment reforms.


© Olive Oil Times | Data source: International Olive Council


“Since 2016 there has been a pos­i­tive change in the for­eign trade of the regional economies, after five years of con­sec­u­tive falls,” Roulet told Olive Oil Times. “In 2017 this trend is being strength­ened, accom­pa­nied by the imple­men­ta­tion of national pro­grams and tools that col­lab­o­rate in the devel­op­ment of a more com­pet­i­tive olive indus­try.”

Roulet is refer­ring to mea­sures by the gov­ern­ment, which loos­ened strict cur­rency con­trols on trad­ing in United States dol­lars, and mea­sures enacted by his branch of the Ministry of Agroindustries. The Added Value Secretariat has intro­duced a num­ber of ini­tia­tives to help improve the com­pet­i­tive­ness of small and medium-sized pro­duc­ers and dif­fer­en­ti­ate Argentine agri­cul­tural prod­ucts from their com­peti­tors.

Among the pro­grams that were cre­ated by the Secretariat last year was a “Made in Argentina” ini­tia­tive to pro­mote agri­cul­tural prod­ucts abroad; a pro­gram to increase organic farm­ing and pro­duc­tion meth­ods, and plans to insti­tute a pro­tected des­ig­na­tion of ori­gin pro­gram sim­i­lar to that of Italy.

Improving qual­ity is the creed of Gobbee. To this end, AOG has been tak­ing steps on the agri­cul­tural front, such as remov­ing the use of pes­ti­cides from the grow­ing process.

“With more cer­ti­fi­ca­tion and increased qual­ity, we think that the sec­tor can con­tinue to grow quickly,” he said.

Improving qual­ity will allow Argentine pro­duc­ers to add more value to their bulk extra vir­gin olive oil exports. Through bulk oil sales to pri­vate label­ers, Gobbee believes the sec­tor can com­pete with Mediterranean pro­duc­ers in the long term.

“Last year, Argentina was the third largest exporter of bulk oil to the United States,” Gobbee said. “What we are doing right now is to give more value to bulk olive oil exports, since we see that in the US, pri­vate label­ing is grow­ing every year.”

AOG, which is the largest olive oil pro­ducer in South America, has also been focus­ing on cus­tomiz­ing blends for spe­cific retail­ers. Gobbee said that by doing this, retail­ers get con­sis­tent fla­vors that match what their cus­tomers demand and pro­vide an option for Northern Hemisphere pro­duc­ers to refresh their olive oil stocks in the off­sea­son.

“In 2017, many buy­ers from Italy and Spain, includ­ing large brands such as Borges and Deoleo, came to see the New World olive oil and we’re work­ing on mak­ing con­tracts with them,” Gobbee said.

Gobbee believes the chal­lenge for Argentine pro­duc­ers will be to con­tinue pro­duc­ing olive oil more quickly than they cur­rently are. This will mean new invest­ments in milling tech­nol­ogy as well as the plant­ing of new olive groves.

“Production com­pa­nies here are very wor­ried about try­ing to cover the vol­ume and the demand this year for the extra vir­gin olive oil because it is grow­ing every year,” he said. “But they are get­ting more invest­ment and plant­ing more.”

He pre­dicts that in the next cou­ple of years, Argentina will be pro­duc­ing between 42,000 and 45,000 tons of oil. The ques­tion will be whether or not demand for Argentine oil grows more quickly than pro­duc­tion.

“I believe that 2019 is going to be another his­tor­i­cally high crop for Argentina, which is really good for us because we sell all of the oil that we pro­duce,” he said. “We hope in 2020 or 2021 we can have at least a reserve of oil. People here are invest­ing more and more in tanks because they can see that the crops are grow­ing in an on-off cycle.”

Alejandro Ovando is the direc­tor of IES Consultores, which has stud­ied the olive oil indus­try in Argentina and recently released a report on the growth of the sec­tor. He is opti­mistic about the future.

“We expect that in the cur­rent year the pro­duc­tion of olives and olive oil will con­tinue to expand and will grow for the third con­sec­u­tive year,” Ovando told Olive Oil Times. “The olive har­vest is promis­ing since it is not expected to be an overly rainy year, which will favor the plan­ta­tions and allow for a greater har­vest and qual­ity.”

Ovando con­tends that these favor­able con­di­tions will, in turn, increase the added value of the prod­ucts on the inter­na­tional mar­ket.

“Olive oil pro­duced in Argentina can com­pete in qual­ity and price world­wide,” he said. “There is no chance that [exter­nal fac­tors such as bet­ter har­vests next year in Mediterranean pro­duc­ing coun­tries] can stop the growth of the sec­tor in the inter­na­tional mar­ket.”




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