`The 'Butterfly Effect' in the Olive Oil Industry - Olive Oil Times
enEnglish
enEnglishfrFrançaiselελληνικάdeDeutscheitItalianozh-CN中文ptPortuguêsesEspañoltrTürkçehrHrvatskija日本語hiहिंदी
enEnglish
enEnglishfrFrançaiselελληνικάdeDeutscheitItalianozh-CN中文ptPortuguêsesEspañoltrTürkçehrHrvatskija日本語hiहिंदी

The 'Butterfly Effect' in the Olive Oil Industry

By Costas Vasilopoulos
Oct. 19, 2012 13:27 UTC

Chaos the­ory says that a minor event such as a but­ter­fly flap­ping its wings could cause unex­pected changes in the broader sys­tem the but­ter­fly lives in, and affect the weather at a dis­tant point by cre­at­ing a lit­tle tor­nado.

Just like econ­o­mists should add a twist of Chaos in their elu­sive the­o­ries of eco­nomic devel­op­ment and pros­per­ity, the olive oil indus­try faces sim­i­lar sit­u­a­tions of var­i­ous but­ter­fly effects which induce a some­times chaotic pat­tern in the sec­tor.

The con­struc­tion of a lux­u­ri­ous hotel com­plex in south­ern Greece spawned new laws for the whole coun­try which bans any dis­posal of the liq­uid residue from olive oil mills into the sea.

As ben­e­fi­cial as this is for the envi­ron­ment at first view, it forces the oil mill own­ers to switch to the mod­ern two-phase oper­a­tion mode or turn to other costly meth­ods of waste dis­posal, with­out any cen­tral plan­ning or guid­ance, or any sup­port­ing funds. The con­se­quences in the long run could be really chaotic, espe­cially if cur­rent unsta­ble con­di­tions con­tinue.

The sum­mer drought in Spain meant lim­ited oil yield and increased prices in Europe and beyond, but then sud­denly it rained cats and dogs in Andalusia and prices dropped with enough rain to sus­tain a larger oil pro­duc­tion. But then tor­ren­tial rains dam­aged trees and washed away the olive dru­pes thus reduc­ing the yield.

Which will it be? Producers, mar­keters and con­sumers around the world don’t know whether to expect a tor­nado or sun­shine, since Spain is the biggest olive oil pro­ducer and, along with Italy, con­trol and influ­ence the global olive oil mar­ket.

Conventional auto­mo­biles run­ning on gas and diesel are allegedly a cli­mate change has­ten­ing fac­tor, and so a bio­fuel car is con­sid­ered to be an envi­ron­men­tally friendly alter­na­tive. But bio­fuel cars need bio­fu­els and this has cre­ated an unpar­al­leled strug­gle for mono­cul­tures, which have in turn reduced the avail­able land for farm­ing other prod­ucts.

And most of the crops of seed oil-pro­duc­ing plants (like sun­flower and soy­beans) are being seized to make biodiesel. This leads to a chain reac­tion of ascend­ing prices: less seed oil in the mar­ket means higher prices, so con­sumers world­wide would turn to olive oil which, in turn, sees prices going up with demand.

As good as this sounds for olive oil pro­duc­ers, an immi­nent increase of the price of other food prod­ucts due to the mono­cul­tures is unavoid­able. Consumers will be con­fronted with an infla­tion­ary trend in prices and cut down on their expenses, and buy­ing less olive oil among oth­ers. Such chaotic phe­nom­ena are very dif­fi­cult to under­stand and pre­dict.

Human inter­ven­tion or not, the but­ter­fly effects indi­cate that the olive oil indus­try is a global, inter­con­nected and per­plexed sys­tem sen­si­tive to occur­rences of minor inci­dents that can lead to huge fluc­tu­a­tions and desta­bi­liza­tion.

More articles on:  , ,

Advertisement
Advertisement

Related Articles