In Chile, Mixed Expectations Replace High Hopes

Summary

Chile antic­i­pates a decline in olive oil pro­duc­tion in 2024 due to fac­tors such as lack of rain­fall and cli­matic insta­bil­ity. Despite chal­lenges, pro­duc­ers in cen­tral Chile are expect­ing a sim­i­lar har­vest to the pre­vi­ous year, while those in north­ern Chile face a sig­nif­i­cant decrease in pro­duc­tion due to a lack of irri­ga­tion.

Officials and pro­duc­ers in Chile antic­i­pate a pro­duc­tion decline in 2024, cit­ing a lack of rain­fall in the north and cli­matic insta­bil­ity at the moment of flow­er­ing in the spring.

According to data from ChileOliva, a pro­duc­ers’ asso­ci­a­tion, the sec­ond-largest pro­duc­ing coun­try in the Americas yielded 21,000 tons of olive oil in 2023, which aligns with the five-year aver­age.

Gabriela Moglia, ChileOliva’s gen­eral man­ager, con­firmed that pro­duc­tion was likely to fall in the coun­try in 2024, adding how the har­vest will unfold from now until July remains uncer­tain.

During late 2023, there had been opti­mism that pro­duc­tion would increase. In its November esti­mate, the International Olive Council fore­casted that pro­duc­tion could reach 24,500 tons in 2024.

In an October inter­view, José Pablo Illanes, the gen­eral man­ager of Las Doscientos, also expressed con­fi­dence for the 2024 har­vest.

However, he caveated that sum­mer weather con­di­tions (sum­mer runs from December through March in the Southern Hemisphere) would play a sig­nif­i­cant role in deter­min­ing the har­vest, and they have.

“The har­vest planned for 2024 is less than what was har­vested in 2023,” Illanes said. ​“The expected decrease is 20 per­cent. This is due to mul­ti­ple fac­tors, such as the tree’s old genet­ics, excess rain­fall in win­ter and cli­matic insta­bil­ity dur­ing the flow­er­ing dates of November 2023.”

Las Docientos cul­ti­vates 700 hectares of olives in the Maule Valley, about three hours south of Santiago.

Illanes said the sig­nif­i­cant rain­fall in the region dur­ing the win­ter alle­vi­ated the drought by refill­ing dams and the Pencahue Canal. However, the rain has also inun­dated the soil in the company’s groves.

“The biggest chal­lenge this year was deal­ing with excess water in the soil,” he said. ​“The coun­tryside’s soils are mainly clays with poor drainage, so excess water accu­mu­lates in the low areas and dam­ages the trees.”

Expectations ahead of the har­vest dif­fer slightly for Olivos del Sur, Chile’s largest olive oil pro­ducer, with 2,500 hectares of olive groves.

Ismael Heiremans, the country’s agri­cul­tural man­ager, said the har­vest in the coun­try’s cen­ter looks sim­i­lar to last year’s.

“The cli­matic con­di­tions of El Niño dur­ing the win­ter allowed for good water sup­ply and a calm sea­son in terms of water resources,” he said.

While El Niño con­tin­ues, Heiremans expects more rain in cen­tral Chile and a lower like­li­hood of an early frost, another sig­nif­i­cant chal­lenge pro­duc­ers face each year.

However, the same does not apply to the company’s olive groves in north­ern Chile. A lack of rain­fall in Coquimbo, about 400 kilo­me­ters north of Santiago, meant the com­pany could not pro­vide enough irri­ga­tion to its trees at the pre­cise moments dur­ing fruit devel­op­ment when water is needed the most.

“Since the pre­cip­i­ta­tion was zero mil­lime­ters, and the sup­ply issue is very com­plex… there is between 40 and 60 per­cent less than the last har­vest, espe­cially in the Arbequina vari­ety, which also suf­fered greatly due to the lack of chill hours and did not allow it to flower cor­rectly,” Heiremans said.

Producers antic­i­pate the har­vest to begin at the end of April. As a result, the sit­u­a­tion could con­tinue to change based on the weather.

“The main con­di­tion for hav­ing a good amount of oil between now and har­vest is the sta­bil­ity of irri­ga­tion, given that all oil gen­er­a­tion is just begin­ning,” Illanes said.

Despite the lower fruit this year, he expects the 45-day har­vest to be more effi­cient after the com­pany invested in new equip­ment.

Away from the har­vest, pro­duc­ers and exporters in Chile con­tinue to nav­i­gate the com­pli­cated global olive oil mar­ket as high prices at ori­gin do not nec­es­sar­ily com­pen­sate for ris­ing pro­duc­tion costs.

Paula Gajardo, Olivos del Sur’s export man­ager, said that some Chilean pro­duc­ers are ben­e­fit­ing as major European bot­tlers seek out new sup­pli­ers in South America to make up for short­falls caused by another poor har­vest in Spain and other parts of the Mediterranean.

“This gen­er­al­ized short­age has raised prices, almost tripling those seen two to three years ago,” she said. ​“On the one hand, this has cre­ated space for Chilean exports and Olisur, in par­tic­u­lar, as a pro­ducer.”

“On the other hand, as olive oil prices rose, Olisur also expe­ri­enced an increase in costs and, there­fore, imple­mented an increase in its prices,” Gajardo added.

Gajardo wor­ries that con­sumers in Chile and abroad will only be able to tol­er­ate higher olive oil prices for so long before they begin to shift toward other grades of olive oil, such as vir­gin or refined, or to other edi­ble oils.

“The extra vir­gin olive oil indus­try is expe­ri­enc­ing a com­plex time, and there are few signs of recov­ery at the moment,” she con­cluded.