Portugal Enjoys Record-High ‘Off-Year’ Harvest

Summary

The Portuguese gov­ern­ment has exempted olive oil from value-added tax to help ease infla­tion’s impact on gro­cery bills. Despite a decline in olive oil con­sump­tion, pro­duc­tion in Portugal is expected to con­tinue grow­ing, with a focus on qual­ity and inter­na­tional recog­ni­tion for Portuguese olive oils. The indus­try is work­ing on dif­fer­en­ti­a­tion and pro­mo­tion strate­gies to com­pete with major pro­duc­ers like Spain and Italy.

Olive oil prices in Portugal are poised to cool down after the gov­ern­ment included olive oil on a list of prod­ucts exempt from value-added tax.

The goal of the new mea­sure is to soften the impact of infla­tion on fam­i­lies’ gro­cery bills.

Expected olive oil con­sump­tion for the 2022/23 crop year in Portugal is esti­mated to reach 61,000 tons by the International Olive Council, slightly below the five-year aver­age.

“Olive oil con­sump­tion has fallen in recent years, which is not exclu­sive to Portugal, with other European pro­duc­ing coun­tries reg­is­ter­ing the same phe­nom­e­non,” Gonçalo Moreira, man­ager of an olive oil sus­tain­abil­ity pro­gram in the south­ern Alentejo region, told Olive Oil Times.

“We are wit­ness­ing changes in eat­ing and con­sump­tion habits, with less cook­ing and more processed foods and less lit­er­acy in food acqui­si­tion and prepa­ra­tion, such as cook­ing food or tra­di­tional dishes,” he added. ​“The younger gen­er­a­tions are also more will­ing to adhere to alter­na­tive diets that gen­er­ally pro­mote other fats.”

Despite stag­nant con­sump­tion, olive oil pro­duc­tion in Portugal con­tin­ues on its upward tra­jec­tory, with pro­duc­ers antic­i­pat­ing a record-high yield for an ​‘off-year’ with many pro­duc­ers enter­ing the low phase of the nat­ural alter­nate-bear­ing cycle of the olive tree.

The long-last­ing drought and weather extremes that affected much of the West Mediterranean basin dur­ing the past year have also affected pro­duc­tion fig­ures. Last August, Portuguese olive oil pro­duc­ers esti­mated the yield would fall below 100,000 tons.

However, data from the National Institute of Statistics (INE) indi­cate that pro­duc­tion in 2022/23 will be far higher. The INE said 126,000 tons had already been pro­duced in the coun­try by the end of December.

This fig­ure would make the cur­rent crop year the fourth-largest in the country’s his­tory, which in recent years reported grow­ing yields. Last year, Portugal enjoyed a record-break­ing har­vest, which the INE said exceeded 230,000 tons. According to the IOC, Portugal pro­duced 206,200 tons last year.

Moreira said it is still too early to tell what the yield may be like in 2023/24, and pre­dic­tions could not be made until the olive flow­er­ing later in the spring. Still, he said invest­ments in mod­ern olive grow­ing in Portugal would likely result in increased pro­duc­tion.

“Olive oil pro­duc­tion in Portugal will con­tinue to grow, with the pos­si­bil­ity of becom­ing the third-largest European pro­ducer,” Moreira said.

“This will be helped by the new olive groves that are being installed and the con­ver­sion of olive groves in canopies to other more pro­duc­tive meth­ods, such as olive groves in hedgerows,” he added.

Alentejo is the coun­try’s most rel­e­vant olive oil-pro­duc­ing region, but invest­ments in mod­ern olive grow­ing are also expand­ing in other areas.

“On top of this, we have an increase in the num­ber of new 4.0 mills, built and equipped with the most mod­ern tech­nol­ogy, which allows for opti­mized olive oil extrac­tion and yields the high­est qual­ity,” Moreira said.

According to INE, olive oil qual­ity in 2022/23 is high, with good organolep­tic char­ac­ter­is­tics and low acid­ity.

“Each year, more com­pa­nies are pro­duc­ing high-qual­ity olive oil in Portugal,” Alberto Serralha, owner of the award-win­ning pro­ducer Sociedade Agrícola Ouro Vegetal, told Olive Oil Times.

He added that the high qual­ity of Portuguese olive oil is sel­dom rec­og­nized as it should be. ​“Portugal needs a pro­fes­sional entity to pro­mote our olive oils on the inter­na­tional mar­kets in the same way as Spain, Greece and Italy do,” Serralha said.

“Today, the path is unclear for qual­ity pro­duc­ers try­ing to grow and dif­fer­en­ti­ate in export mar­kets due to scale and lim­ited mar­ket­ing bud­get,” he added. ​“Additionally, the com­pe­ti­tion from other coun­tries is quite seri­ous; nowa­days, any pro­duc­ing region has excep­tional pro­duc­ers.”

“The log­i­cal path for high-qual­ity Portuguese pro­duc­ers is to seek dif­fer­en­ti­a­tion that tra­di­tional vari­eties pro­vide as some­where there is a mar­ket that appre­ci­ates their unique­ness,” Serralha con­tin­ued.

Another award-win­ning pro­ducer, Antonio Duarte, owner of Viveiros Monterosa, con­firmed that much more could be done to improve inter­na­tional recog­ni­tion for Portuguese olive oils.

“There is still a lot to do for the brand ​‘Made-in-Portugal’ com­pared to major olive oil pro­duc­ers such as Spain or Italy,” he told Olive Oil Times. ​“In recent years, a pol­icy pro­mot­ing Portuguese olive oil has been devel­oped, but we still have a long way to go.”

“The gen­eral feel­ing is that Portuguese olive oil is of excel­lent qual­ity, but it is not very easy to find,” Duarte added. ​“Most high-qual­ity olive oil pro­duc­ers are small or medium-sized.”

Still, he acknowl­edged that the sit­u­a­tion is slowly improv­ing. ​“Portuguese olive oils have been more val­ued in recent years mainly because they have been awarded reg­u­larly in var­i­ous inter­na­tional com­pe­ti­tions,” Duarte said.

“All the work that pro­duc­ers have done and their recog­ni­tion with the awards has facil­i­tated the accep­tance of our olive oils, and lit­tle by lit­tle, we see the Portuguese olive oils being mar­keted in var­i­ous coun­tries,” he said.

As the new sea­son rapidly approaches, Moreira said: ​“2023 started cold and with lit­tle rain. At the end of February, the south was already in a mild to mod­er­ate drought, with the cen­ter and north in a nor­mal sit­u­a­tion of humid­ity and rain for the sea­son.”

“Despite the humid­ity in March, the high tem­per­a­tures do not allow water to build up in the soil,” he added.

Still, the river basin lev­els are reas­sur­ing, sit­ting at least 85 per­cent capac­ity in the south. However, water scarcity is always on grow­ers’ minds.

“Olive grow­ers know the impact that the lack of water can bring and have made their olive groves more resilient,” Moreira con­cluded.

• Publico
• National Institute of Statistics