Ahead of a Bumper Harvest, Lebanese Producers Demonstrate Resilience

Summary

Lebanon is expect­ing a boun­ti­ful olive har­vest this year due to higher lev­els of pre­cip­i­ta­tion, with pro­duc­ers antic­i­pat­ing a yield that could be the sec­ond-largest on record. Rising energy costs and infla­tion have sig­nif­i­cantly increased pro­duc­tion expenses for olive oil pro­duc­ers, who are focus­ing on exports due to the eco­nomic chal­lenges in Lebanon.

Amid ongo­ing polit­i­cal and eco­nomic tur­moil, the olive har­vest is get­ting under­way in Lebanon, and pro­duc­ers around the coun­try antic­i­pate a boun­ti­ful har­vest.

“As far as quan­tity, the har­vest is much bet­ter this year,” Ibrahim Al Kaakour, the owner of Genco Olive Oil, told Olive Oil Times. ​“Last year, there was a very big drought which decreased both quan­tity and qual­ity.”

Al Kaakour buys olives from all four cor­ners of Lebanon to pro­duce his blends, which he mainly exports. He added that he is still at the begin­ning of the har­vest but expects to pro­duce about 40 to 50 tons of olive oil.

Official pro­duc­tion esti­mates have not been pub­lished, but International Olive Council data show that Lebanon pro­duced 21,500 tons of olive oil in the 2021/22 crop year, slightly above the rolling five-year aver­age of 19,200 tons.

Al Kaakour and other pro­duc­ers inter­viewed by Olive Oil Times expect this year’s har­vest to exceed last year’s and pos­si­bly the 26,000 tons pro­duced in the 2020/21 crop year, which would make this the sec­ond-largest yield since records began.

Al Kaakour attrib­uted the boun­ti­ful har­vest to higher lev­els of pre­cip­i­ta­tion through­out the year, topped off by timely rain just before olive pick­ing began in October.

Last year, it did not rain sig­nif­i­cantly in Lebanon until December, which decreased the quan­tity of olives that devel­oped on the trees and the qual­ity of the oil pro­duced.

Walid Mushantaf, the co-owner of Bustan el Zeitoun, located in south­ern Lebanon, told Olive Oil Times that he was expect­ing one of his best har­vests.

“For sure, we had dif­fi­cul­ties, but this sea­son is one of the best in the past four or five years,” he said. ​“Quality and quan­tity are good.”

He also attrib­uted the bumper crop to plen­ti­ful and timely rains. In pre­vi­ous years, rain coin­cided with the blos­som­ing of the olive trees in May, which pre­vented pol­li­na­tion from occur­ring.

On the other side of Lebanon, Karim Arsanios, the owner of Solar Olives, is close to com­plet­ing his har­vest and expects to pro­duce about 3.5 tons of olive oil.

“This year was much bet­ter than last year in terms of quan­tity,” he told Olive Oil Times. ​“We got approx­i­mately two to three times what we got last year in terms of yield.”

Arsanios is in his third year of pro­duc­tion and said his busi­ness also is focused mainly on exports. He ships about 80 per­cent of his out­put abroad to bring in hard cur­ren­cies, includ­ing dol­lars and Euros, to pay for his ever-ris­ing pro­duc­tion expenses.

Chief among these expenses is the cost of elec­tric­ity and fuel. Large swaths of Lebanon have not enjoyed round-the-clock elec­tri­cal cov­er­age since the 1990s. As a result, most pro­duc­ers rely on gen­er­a­tors to power their mills.

Compounding their chal­lenges, Lebanon’s state elec­tric­ity provider recently raised its prices for the first time in more than three decades.

“We are not get­ting elec­tric­ity from the power sta­tions,” Al Kaakour said. ​“Mills are now using their own gen­er­a­tors, and the price is much higher than get­ting elec­tric­ity from the gov­ern­ment.”

Al Kaakour used to pay $0.09 per kilo­watt hour from the gov­ern­ment. Now those prices are closer to $0.20 per kilo­watt hour for one or two hours of elec­tric­ity per day. Using his gen­er­a­tor, Al Kaakour esti­mates that he is pay­ing about $0.60 per kilo­watt hour.

“Costs have been sky­rock­et­ing, espe­cially energy costs,” Arsanios con­firmed. ​“They’ve dou­bled, even tripled, com­pared to last year.”

Rising energy costs make every­thing more expen­sive. Away from his mill, Mushantaf relies on elec­tric­ity to power his irri­ga­tion sys­tem. He lamented that increas­ing prices for fer­til­izer and pes­ti­cides have also made pro­duc­tion much more expen­sive.

As a result of ram­pant infla­tion in Lebanon, which is expe­ri­enc­ing the sec­ond-high­est infla­tion rate glob­ally in 2022, Mushantaf has essen­tially given up on the local mar­ket.

“We are mainly focused on exports because pur­chas­ing power in Lebanon has fallen dra­mat­i­cally,” he said.

According to World Bank data, annual con­sumer price infla­tion rose from 3 per­cent in 2019 to 155 per­cent in 2021.

Mustantaf used to sell to local restau­rants and cater­ing busi­nesses, but the dra­matic decrease in tourism means demand from these sec­tors has evap­o­rated. ​“The only way for us to sur­vive is to find new mar­kets out­side the coun­try,” he said.

Al Kaakour added that prices for glass bot­tles and other pack­ag­ing mate­ri­als have also increased sig­nif­i­cantly. ​“For a coun­try that does­n’t pro­duce glass bot­tles locally, that’s a huge prob­lem,” he said.

Unlike their coun­ter­parts in Europe – angry olive grow­ers have suc­cess­fully lob­bied gov­ern­ments in Spain, Italy and Greece for sub­si­dies and other forms of sup­port – there is no help from the gov­ern­ment in Lebanon.

The cur­rency cri­sis means many senior civil ser­vants – the lifeblood of any func­tion­ing gov­ern­ment bureau­cracy – have left the coun­try in droves.

For pro­duc­ers, this means wait­ing months to receive the nec­es­sary export per­mis­sions from two sep­a­rate min­istries, which they said puts them at a com­pet­i­tive dis­ad­van­tage.

“We are com­pletely left to our own devices,” said Arsanios, adding that a strong sense of com­mu­nity has devel­oped among pro­duc­ers as they seek to pro­vide assis­tance that the gov­ern­ment can­not.

However, they worry that their oper­a­tions will become unsus­tain­able as the coun­try’s polit­i­cal and finan­cial crises approach their fourth year, even as they con­tinue to pro­mote Lebanese olive oil abroad.

“We’ve been able to gen­er­ate enough cash to sus­tain our ris­ing costs, but we received zero aid from the gov­ern­ment,” Arsanios said. ​“With the new har­vest, we will have to reflect that cost to the cus­tomer.”

“We’ll have to increase our prices across all prod­ucts, but there’s only so much you can pass on to the con­sumers,” he con­cluded. ​“I’m not sure if there’s going be a break­ing point.”