Producers expect a better olive harvest than last year but worry about inflation and the impact of rising prices on demand.
Despite the ongoing drought across much of the country’s fertile central valley, growers and producers across Chile are optimistic about the upcoming olive harvest.
According to the country’s meteorological agency, the hydrological deficit in the region continued to grow in December, the last month for which data are available. The entire central valley, home to most of the country’s olive groves, is now in a moderate drought.
Everything indicates that the quality of this production is much better than last year.
Still, producers expect the 2023 harvest to exceed the 2022 harvest, which yielded 21,000 tons of olive oil, slightly below the rolling five-year average.
“Apparently, it’s better than last year, but we’ll know when the harvest is over,” Gabriela Moglia, the general manager of ChileOliva, a producer association, told Olive Oil Times.See Also:2023 Harvest Updates
Most producers anticipate the harvest to begin in the middle of April and run through June, depending on weather conditions.
In the groves of Olivos del Sur, the country’s largest producer, agroindustrial manager Ismael Heiremans told Olive Oil Times that the harvest would begin in the second week of April and run until the end of June.
He said Olivos del Sur expects to produce 3.1 million liters, about the same as the company did last year. “Everything indicates that the quality of this production is much better than last year,” he said. “We also hope that this season will be frost-free.”
Santiago Sarquis, Aura Olive Oil’s commercial manager, also expects an average harvest this year. He told Olive Oil Times that his company would harvest its 1,070 hectares of olive groves starting at the end of April.
“This year, in general, an average harvest is being estimated; the last harvest was relatively low for the industry and was badly hit by a frost during May,” he said. “This year, for the moment, there are no big problems from the agricultural point of view.”
José Manuel Reyes, the commercial manager at Agrícola Pobeña, told Olive Oil Times he anticipates good results when the company’s harvest also gets underway in the second week of April.
“For this harvest, we hope to have very good results in terms of kilograms of fruit per hectare,” he said. “This year, we had more rain than the last two years, which has allowed us to irrigate the grove better than in previous years.”
“We also project to have a better oil yield than last year, which was well below the historical average,” Manuel Reyes added.
While timely rain helped irrigate Agrícola Pobeña’s groves in time for the harvest, Moglia said the drought remained the primary concern for producers nationwide.
“It remains the main challenge for agriculture in general,” she said. “Fortunately, weather experts have indicated that this winter [from June to September] could be wetter than in previous years.”
Since olive oil consumption remains quite low in Chile compared to production – the country’s 20 million people consumed an average of 9,400 tons of olive oil per annum over the past half-decade – many producers focus their efforts on exports.
According to the International Olive Council, the country exported 7,300 tons of olive oil last year. In the past half-decade, Chile has exported 62 percent of its production.
Claudio Lovazzano, head of marketing at Olivos del Sur, told Olive Oil Times that headaches created by the Covid-19 pandemic and global supply chain disruptions have given way to new challenges.
“A rather unstable market due to global and local inflation, which has raised the costs of all inputs and the fall in olive oil production in Europe, makes prices rise a lot, slowing consumption down a lot,” he said. “There is also quite a bit of uncertainty in exchange rates as well, something that affects us quite a bit as a mainly export company.”
Sarquis echoed these concerns about rising prices. While he believes it will help bulk exporters, he said rising prices would be more complicated for bottled exports.
“From a commercial point of view, the PoolRed [the online olive oil database run by the Andalusian government] price is very high, which greatly helps bulk sellers,” Sarquis said. “Bottle sellers are a bit more complicated because it is very difficult to pass that price on to the final customer.”
However, Manuel Reyes is less worried about some of these factors, expressing his relief that the global shipping rates have finally come down from unprecedented highs in the past two years.
“In previous years, we faced the contraction of many markets due to Covid-19, added to the high rates and terms of maritime freight; this year, we have a more positive scenario in this regard,” he said.
“Therefore, we believe that the great challenge will be in the harvest and process to be able to obtain good yields while always maintaining our focus on quality,” Manuel Reyes concluded.