Argentine Producers Await Word on Export Policies As Harvest Nears

Producers in Argentina are expecting a better harvest this year as they look to a new government to spur more exports.

Dec. 11, 2019
By Matthew Cortina

Recent News

Now in the mid­dle of its grow­ing sea­son, Argentina’s olive oil pro­duc­ers are expect­ing pro­duc­tion to remain steady when har­vest time comes in spring 2020.

The fore­cast is encour­ag­ing even as domes­tic con­sump­tion remains rel­a­tively low and a new admin­is­tra­tion with new agri­cul­tural poli­cies that could shake up the country’s robust export mar­ket is com­ing into office.

Any opti­mism felt among Argentina’s olive oil pro­duc­ers is the result of a boost in exports in recent years, pri­mar­ily to the United States and Europe.

We hope that the new admin­is­tra­tion will take the nec­es­sary and right mea­sures to main­tain our inter­na­tional mar­kets, but we do not have offi­cial clar­ity of state poli­cies on for­eign trade yet.- Gabriel Guardia, Olivícola Laur

Argentina’s exports of olive oil grow year after year,” said Frankie Gobbee, co-founder of the Argentina Olive Group (AOG), the largest olive oil pro­ducer in Latin America. Argentina is the first coun­try in America and the third in the world to export extra vir­gin olive oil in bulk to the U.S.

Gobbee said Argentine pro­duc­ers also export fresh extra vir­gin olive oil to inter­na­tional brands in Europe, so they can refresh and lead their vir­gin oils that are already six months old.”

Exporting is the main dri­ver of com­merce for Argentine pro­duc­ers because, despite the fact that Argentina is the largest pro­ducer of olive oil in North and South America, domes­tic con­sump­tion is low, rel­a­tive to other olive-oil-pro­duc­ing coun­tries.

See Also: Olive Oil Trade News

Argentina con­sumes less than a quar­ter of a liter of olive oil per per­son per year, com­pared with 12 liters in Spain, accord­ing to the International Olive Council (IOC).

The exports are increas­ing in our olive oil fac­tory but [con­sump­tion in Argentina] is not,” said Gabriel Guardia, facil­ity man­ager at Olivícola Laur, an NYIOOC World Olive Oil Competition award-win­ning pro­ducer. Competing with European prices is com­pli­cated by the costs; prices can­not be matched.”

However, Gobbee said that domes­tic con­sump­tion has been grow­ing lit­tle by lit­tle” since Argentina pro­duces fresh olive oil on the oppo­site sched­ule of European pro­duc­ers.

Notwithstanding the slow rate of growth of domes­tic con­sump­tion, the qual­ity of Argentine olive oil is one rea­son exports have taken off.

People are becom­ing famil­iar with the olive oil made here because the pro­duc­ers take a lot of care about the qual­ity,” Guardia said. It has been a pri­or­ity for years to let peo­ple know about the good qual­ity of Argentine extra vir­gin olive oils.”

Growers pro­duce low-acid olive oil on largely pes­ti­cide-free land using native cul­ti­vars, such as Arauco, along with tra­di­tional Italian and Spanish cul­ti­vars that thrive in Argentina’s unique cli­mate.

Spanish Arbequina and stal­wart Italian vari­eties Coratino, Leccino and Frantoio all flour­ish in Argentina’s cli­mate of hot days and cool nights.

They have adapted very well to the Argentine cli­mate, and they have shown dif­fer­ent char­ac­ter­is­tics from the orig­i­nal vari­eties,” Guardia said. His NYIOOC Gold-win­ning Establecimiento Olivum Blend Medio has a dis­tinct herbal note with a robust spici­ness that typ­i­fies the best Argentine olive oils.

The exper­i­ment of grow­ing European cul­ti­vars in Argentina has been so pos­i­tive that some Italian and Spanish pro­duc­ers are form­ing part­ner­ships in the coun­try to mit­i­gate bad grow­ing sea­sons in Europe.

Lucini Italia, for instance, recently released its Everyday Extra Virgin Olive Oil, made of olive oil 100 per­cent sourced from Argentina. Citing the new world inno­va­tion hap­pen­ing in Argentina” Mike Forbes, exec­u­tive pres­i­dent of Lucini’s par­ent com­pany, said the part­ner­ship will help raise the pro­file of Argentine olive oil.

Thus, grow­ing Argentina’s indus­try is a mat­ter of invest­ment, accord­ing to Gobbee. More pro­duc­ers on more land are needed to cul­ti­vate the country’s fer­tile grow­ing regions.

We have more land, we need more invest­ment to keep on grow­ing in terms of vol­ume,” Gobbee said. We have the Andes range that pro­vides fresh water every year to the olive trees.”

Frankie Gobbee (OOT file)

Guardia added that although there are envi­ron­men­tal fac­tors that limit olive oil pro­duc­tion in the coun­try – dry Zonda winds fly off the Andes at up 150 miles per hour dur­ing the grow­ing sea­son, some­times leav­ing only five per­cent of fruit on the trees, he said – gov­ern­ment sup­port is needed to increase exports, and thus the industry’s growth.

The gov­ern­ment sup­port also affects [the indus­try] because pro­duc­ers are bet­ter off sell­ing the estate and doing busi­ness rather than main­tain­ing it,” Guardia said.

That is likely due to the high cost, com­par­a­tively, of agri­cul­ture in the coun­try and its asso­ci­ated taxes, which are crit­i­cal to the country’s econ­omy as agri­cul­tural exports are one of its biggest rev­enue sources.

Guardia is hope­ful a new admin­is­tra­tion, led by the left-lean­ing President Alberto Fernández, will sup­port the country’s olive grow­ers, though there is con­cern about tax hikes on exports and main­tain­ing diplo­matic and com­mer­cial ties with the U.S. and other major mar­kets for Argentine olive oil.

The new gov­ern­ment has not made any announce­ments about its for­eign pol­icy,” Guardia said. We hope that the new admin­is­tra­tion will take the nec­es­sary and right mea­sures to main­tain our inter­na­tional mar­kets, but we do not have offi­cial clar­ity of state poli­cies on for­eign trade yet.”

Gobbee is more opti­mistic about the new admin­is­tra­tion, say­ing that it is look­ing to increase expor­ta­tion and look­ing for bet­ter ways to tax local and regional agri­cul­ture com­pa­nies.”

It’s a good moment to grow on Argentina plan­ta­tions,” Gobbee said, adding that the new gov­ern­ment will give more impor­tance to agri­cul­ture and exports… [because] they know that agri­cul­ture is very impor­tant for our coun­try.”

Until Fernández’s poli­cies – and the impact of Cristina Fernández de Kirchner, Fernández’s run­ning mate and the for­mer pres­i­dent who pre­vi­ously imposed export quo­tas on the agri­cul­ture sec­tor – are made clear, Argentine pro­duc­ers will look for­ward to a pro­jected 25,000-ton har­vest and hope its export mar­kets remain viable.


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