BERCI INTERNATIONAL CONSULTING
BACKGROUND STUDY ON THE OLIVE SECTOR IN
ARGENTINA
(PROJECT CFC/IOOC/08)
Prepared By BERCI International Consulting
In collaboration with
The Faculty of Health of the National University of Catamarca and IVALSA
October 2010
Table of contents
Foreword...................................................................................................................................................... 3
Chapter I: Overview of the world olive production ................................................................................ 5
Introduction.............................................................................................................................................. 5
Olive oil: ................................................................................................................................................. 11
Chapter II: Olive development in Argentina ......................................................................................... 20
A.
Agricultural development in Argentina .................................................................................. 20
B.
Development of olive cultivation in Argentina ...................................................................... 21
Background: ...................................................................................................................................... 21
Production and capacity: ................................................................................................................. 24
Socio-economic importance: .......................................................................................................... 25
The olive production industry: ........................................................................................................ 26
Transformation of the olive oil processing sector: ....................................................................... 28
Internal consumption: ...................................................................................................................... 29
Foreign trade:.................................................................................................................................... 30
Exports: .......................................................................................................................................... 30
Imports: .......................................................................................................................................... 39
Conclusion:................................................................................................................................................ 44
ANNEXES ................................................................................................................................................. 46
Annex I: IOC standards ....................................................................................................................... 46
Annex II: Case study : Cooperativa Olivicola Los 12 Olivos ltda. ................................................. 48
Annex III: Bibliography......................................................................................................................... 50
2
Foreword
This Background Study is intended to highlight the importance of the olive sector and its
role in the development of agriculture in Argentina
It is part of the activities currently under implementation within the framework of project
CFC/IOC/08 Creation of a Pilot Demonstration Plant and Training to Improve Olive Oil
Quality in Latin America, funded by the Common Fund for Commodities and supervised
by the FAO Intergovernmental Group on Oilseeds, Oils and Fats. The Project Executing
Agency of the Project is BERCI International Consulting, with technical support from
IVALSA. The Collaborating Institution in Argentina is the Faculty of Health of the
National Univeristy of Catamarca where the project is located.
The project is aimed at raising the earnings of the farmers and adding value to the
commodity in terms of the productivity of olives and the quality of olive oil, through the
accomplishment of four specific project outputs:
1- setting up of a modern olive oil Pilot Processing Plant;
2- demonstrating the modern processing methods for the production of high quality
olive oil;
3- providing coordinated training in olive processing and olive orchard management;
4- promoting investment in modern olive processing facilities and disseminating
project findings in the Latin American region.
The project will enhance the cost-effective and environmentally sustainable production
of a high quality olive oil in the region of Catamarca, Argentina, as a means to improve
the livelihoods of the small holder olive farmers and boost the overall sustainable
economic development of the region through a modern olive oil sector. The innovative
character of the technology applied will allow the production of a top-quality oil, assuring
the most efficient utilisation of the commodity, together with the highest opportunity of
waste reduction for yield maximisation, and the recycling of the by-product for an
environmentally friendly processing of the olive.
This pilot plant is intended to serve as a model which can be replicated in other Latin
American countries.
In order to place the argentinian olive sector within the general world context , we have
provided in Chapter I information on the production and trade of table olives and olive oil
worldwide, including not only the traditional producing countries of the mediterranean
basin but also newcomers in other continents like Australia and the USA.
3
Chapter II focuses on the development of the olive sector in Argentina and its role in the
overall development of agriculture in particular and of the economy in general.
This chapter also offers an analysis of trade statitics to better understand the olive oil
sector in Argentina.
It is our hope that this Background Study will demonstrate that the project funded by the
Common Fund for Commodties is relevant and that it will contribute to the development
of the olive sector in the region.
4
Chapter I: Overview of the world olive production
Introduction
Origin and history:
The origins of the wild olive tree are to be found in Asia Minor where it is extremely
abundant and grows in thick forests. It appears to have spread from Syria to Greece via
Anatolia (De Candolle, 1883) although other hypotheses point to Lower Egypt, Nubia,
Ethiopia, the Atlas Mountains or certain areas of Europe as its source area. Caruso for
that reason believed it to be indigenous to the entire Mediterranean Basin and considers
Asia Minor to have been the birthplace of the cultivated olive some six millennia ago.
The Assyrians and Babylonians were the only ancient civilisations in the area who were
not familiar with the olive tree.
Taking the area that extends from the southern Caucasus to the Iranian plateau and the
Mediterranean coasts of Syria and Palestine (Acerbo) to be the original home of the
olive tree, its cultivation developed considerably in these last two regions, spreading
from there to the island of Cyprus and on towards Anatolia or from the island of Crete
towards Egypt.
In the 16th century BC the Phoenicians started disseminating the olive throughout the
Greek isles, later introducing it to the Greek mainland between the 14th and 12th
centuries BC where its cultivation increased and gained great importance in the 4th
century BC when Solon issued decrees regulating olive planting.
From the 6th century BC onwards, the olive spread throughout the Mediterranean
countries reaching Tripoli, Tunis and the island of Sicily. From there, it moved to
southern Italy. Presto, however, maintained that the olive tree in Italy dates back to
three centuries before the fall of Troy (1200 BC). Another Roman annalist (Penestrello)
defends the traditional view that the first olive tree was brought to Italy during the reign
of Lucius Tarquinius Priscus the Elder (616 - 578 BC), possibly from Tripoli or Gabes
(Tunisia). Cultivation moved upwards from south to north, from Calabria to Liguria.
When the Romans arrived in North Africa, the Berbers knew how to graft wild olives and
had really developed its cultivation throughout the territories they occupied.
The Romans continued the expansion of the olive tree to the countries bordering the
Mediterranean, using it as a peaceful weapon in their conquests to settle the people. It
was introduced in Marseilles around 600 BC and spread from there to the whole of
5
Gaul. The olive tree made its appearance in Sardinia in Roman times, while in Corsica it
is said to have been brought by the Genoese after the fall of the Roman Empire.
Olive growing was introduced into Spain during the maritime domination of the
Phoenicians (1050 BC) but did not develop to a noteworthy extent until the arrival of
Scipio (212 BC) and Roman rule (45 BC). After the third Punic War, olives occupied a
large stretch of the Baetica valley and spread towards the central and Mediterranean
coastal areas of the Iberian Penisula including Portugal. The Arabs brought their
varieties with them to the south of Spain and influenced the spread of cultivation so
much that the Spanish words for olive (aceituna), oil (aceite), and wild olive tree
(acebuche) and the Portuguese words for olive (azeitona) and for olive oil (azeite), have
Arabic roots.
With the discovery of America (1492) olive farming spread beyond its Mediterranean
confines. The first olive trees were carried from Seville to the West Indies and later to
the American Continent. By 1560 olive groves were being cultivated in Mexico, then
later in Peru, California, Chile and Argentina, where one of the plants brought over
during the Conquest - the old Arauco olive tree - lives to this day.
In more modern times the olive tree has continued to spread outside the Mediterranean
and today is farmed in places as far removed from its origins as southern Africa,
Australia, Japan and China. As Duhamel said, "the Mediterranean ends where the olive
tree no longer grows", which can be capped by saying that "There where the sun
permits, the olive tree takes root and gains ground".
6
Olive production:
Olives are one of the most extensively cultivated fruit crops in the world. In 2008 there
were 10.5 million hectares planted with olive trees, which is more than twice the amount
of land devoted to apples, bananas or mangoes. Only coconut trees and oil palms
commanded more space.
Cultivation area more than tripled from 2,608,804 to 10,549,973 hectares between 1961
and 2008. The ten largest producing countries, according to the Food and Agriculture
Organization (FAO), are all located in the Mediterranean region and produce 94% of the
world's olives. Together those olives producing countries also occupy more than 95% of
the total cultivated area (see Table 1).
(Source: FAO database)
7
Table 1: Main olive producing countries (Year 2008)
Rank
Country/Region
Production
(in tons)
Cultivated
area
(in hectares)
Yield (Hg/Ha)
World
17,658,661
10,549,973
16,738
Spain
Italy
Greece
Turkey
Tunisia
Syria
Morocco
Egypt
Portugal
Algeria
5,475,300
3,473,600
2,313,055
1,464,248
1,183,000
827,033
765,380
480,071
345,800
254,067
2,450,471
1,180,500
800,000
707,593
3,000,000
617,060
547,600
109,947
380,700
282,460
22,343
29,424
28,913
20,693
3,943
13,402
13,976
43,663
9,083
8,994
Total top 10
Share (in percent)
16,581,554
93.90%
10,076,331
95.51%
-
Libya
Argentina
Jordan
Occ. Palestinian Terr.
Lebanon
USA
Peru
Australia
Albania
Israel
180,000
150,000
94,068
85,770
76,200
60,600
57,700
57,123
56,200
48,750
200
52,000
60,531
90,090
58,600
12,141
10,415
10,500
45,000
16,000
9,000,000
28,846
15,540
9,520
13,003
49,913
55,400
54,402
12,488
30,468
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
(Source: FAO database)
8
Outside the traditional olive producing countries (countries bordering the Mediterranean
Sea), olive production has particularly increased in the United States, Australia and
Argentina.
Today, California remains the only U.S. state to commercially produce olives. In the last
ten years, California olive growers have used Italian, Spanish and Greek varieties and
high-density plantings to take advantage of mechanical harvesters for more efficient
production.
Olive production has been highly variable over the years, largely due to the alternatebearing nature of olive tree production. The 2009 crop totalled 42,800 tons and was
valued at $40.3 million. California accounted for 31,000 acres of olives in the United
States. Total acreage has remained between 30,000 and 40,000 acres since 1980. In
2009, 23,000 tons of the olive crops were used for canning and 18,000 tons were
crushed for olive oil (USDA National Agricultural Statistics Service).
Special attention should be paid to the new plantations in non-traditional producing
countries such as Argentina and Australia.
In Argentina, the 90s have witnessed the beginning of a period of very significant
development for olive cultivation and olive oil production after the abandonment and
falling production of the 70s and 80s. This resurgence of the olive cultivation and the
olive oil sector in Argentina can mainly be explained by the 3 following factors:
 the promotion of olive oil as being beneficial for health
 higher international prices for olive oil
 tax incentives granted by the Administration to encourage investments in the
agricultural sector
Similar factors can explain the upsurge in olive cultivation in Australia. It is estimated
that 15 years ago, Australia had only 2,000 hectares of traditional olive groves. Over the
past 10 years, some 20,000 hectares of modern olive groves have been planted.
Both in Argentina and Australia, olive cultivation is expected to continue to increase,
bringing with it modernization and considerable improvement in industrial extraction
capacity.
It must be remembered, however, that in Argentina, and even more so in Australia, the
production levels are fairly low in comparison with those of the traditional producing
countries. In addition, while Argentina already exports and will increase its export
capacity over the coming years, Australian production aims to supply a growing
domestic market and to replace imports.
9
The crop:
The olive tree (Olea europaea) is a robust tree that may live for centuries. It needs little
water and is generally grown in dry land. The tree can resist to cold weather but it might
be affected by long frost which would destroy leaf buds and reduce production
considerably. If cultivated properly, an olive tree can start producing olives after 5 years.
However, the yield is optimum only after ten years.
Harvest is still mostly made on a traditional way. Olives are beaten from the trees and
collected on the floor or picked directly from the tree and put on a basket. Modern
techniques use hoovers or machines that shake the trees.
Table 2: Olive production, area harvested and yield (1991-2009)
Year
Area Harvested
(in 1000 Ha)
Yield (Hg/Ha)
Production
(in 1000 tons)
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
7,439.60
7,480.53
7,588.09
7,559.26
7,658.98
7,976.13
7,709.07
7,951.32
8,303.53
8,352.37
8,421.12
8,431.70
8,785.21
9,156.49
10,148.62
10,336.94
9,967.85
10,549.97
9,922.84
17,228
14,608
14,403
15,070
13,328
19,279
19,597
18,182
17,110
18,703
18,379
18,533
20,886
19,665
15,735
17,977
17,020
16,738
18,383
12,817.38
10,928.14
10,929.81
11,392.46
10,207.89
15,377.24
15,107.53
14,457.57
14,207.94
15,621.64
15,477.57
15,626.52
18,349.58
18,006.78
15,969.30
18,582.84
16,965.49
17,658.66
18,241.81
(Source: FAO database)
10
Olive oil:
Origin and history:
Olive oil is known from the prehistoric ages as amphorae that contained the golden
liquid were discovered all around the Mediterranean basin.
The earliest surviving olive oil amphorae date to 3500 BC (Early Minoan times), though
the production of olive oil is assumed to have started before 4000 BC.
Phoenicians grew olive trees in Syria and Palestine and later the Greeks spread the
crop out all over the Mediterranean countries. During the Middle Ages, olive oil
continued to increase in production and importance primarily in Spain, Italy, and
Greece. It declined in North Africa and other areas taken over by Turks, but was revived
later in Arab-controlled countries. The greatest expansion of olive oil production came
after the 1700s, when large plantings of olives, largely relegated to the worst land, were
made to supply the growing populations of cities. In the late 19th and 20th centuries, the
development of low-cost solvent extraction techniques for seed oils and the use of other
sources for light (gas and electricity) resulted in a drop in the demand for olive oil. As
little as 40 years ago there was an excessive supply of olive oil on the world market.
The widespread poverty in Spain, southern Italy, and Greece restricted the use of more
expensive products like olive oil. To compete in price with seed oils, olives were not
often grown with quality in mind. Olives were left in piled heaps to rot for months before
being processed, to facilitate greater extraction of the oil. It has been well documented
that various types of seed oils such as cotton, hemp, sesame, palm nuts, sunflower, and
hazelnut have been used to adulterate olive oil and to make it more cost competitive.
The development of the International Olive Council was in part a response to
widespread fraud in the olive oil trade surrounding the sale of olive pomace oil,
mislabelled as extra virgin olive oil.
Because olive trees can live for hundreds of years and take many years to reach full
production, the selection and spread of better varieties would have been mostly into
newly planted areas. This lack of orchard turnover and difficulties in travel for farmers
probably are the reasons why many different olive varieties still exist in parts of Europe.
In some cases, each village or different growing area has their own obscure variety,
sometimes with different names for the same variety, and sometimes different varieties
have the same name. There was certainly some natural selection that occurred, but it
was more likely that better varieties were brought in from other areas through trade.
Only the vastly superior varieties would have been more widely planted. This is certainly
11
true today; only about 20 primary varieties have been imported into California, South
Africa, Australia, New Zealand, Chile and Argentina.
Olive oil yield:
Today, an estimated 800 million olive trees can be found growing on six continents
around the world - 90 percent of which are found in the Mediterranean region. Olive
fields have between 100 and 250 trees per hectare. Each olive tree produces an
average of 15 to 50 kilos of olives. Depending on variety and pressing method, a litre of
olive oil requires between 4 and 6 kilos of olives. Therefore, olive oil production may
attain 3000 litres per hectare and per year.
Olive yields are very variable from one year to another depending on how the tree is
treated and by nature olive tree production changes by threefold every two years.
Olive Oil Production:
According to the IOC, world production of olive oil for 2009/10 (crop year) is expected to
top 3,100,000 tons, the second biggest harvest ever recorded after the all-time high of
2003/04.
(Source: IOC)
12
Olive oil production has historically been concentrated in the Mediterranean basin
countries. In 2009/2010, all of the 8 largest producers of olive oil were countries
belonging to that region: Spain, Italy, Greece, Syria, Turkey, Tunisia, Morocco and
Algeria. Together these 8 countries account for more than 92% of the world’s
production. As a whole, the Mediterranean basin countries account for more than 95%
of the world’s production.
With more than 41% of the world's production, Spain is the top producer of olive oil in
the world (Figure 4). According to the IOC’s final figures for 2009/10, Spain will record a
production of 1,391,000 tons, its third best harvest to date, a 36% increase compared to
the previous season and a 33% increase compared to the previous four year average.
E.U. /27 countries account for more than 74% of the world’s production.
Among Mediterranean basin countries, the main non- E.U. /27 producers are in order:
Syria (5.21%), Turkey (5.10%), Tunisia (4.86%), Morocco (3.30%) and Algeria (1.74%).
Together, non-Mediterranean basin, non- E.U. /27 countries, account for only 2.43% of
the world’s production. Argentina is the largest olive oil producer among nonMediterranean basin, non- E.U. /27 countries, Australia is the second largest.
(Source: IOC)
13
The evolution of the world production of olive oil during the last twenty years is shown in
the graph above (Figure 5).
If we compare six-year averages, the average world production from 1997/98 to 2002/3
has increased by almost 26% compared to the average world production from 1991/92
to 1996/97.
But the average world production from 2003/4 to 2008/9 has only increased by 12%
compared to the average world production from 1997/98 to 2002/3.
Most of the expansion occurred in the largest producing countries, although changes in
production have not been homogeneous across them. The flattening of the curve is
explained by the fact that the 3 largest producers, Spain, Italy and Greece (together
those 3 countries represent 73% of the world production) are “mature” producers who
continue to grow but at a slower rate.
If we compare the 1997/98 to 2002/3 and 2003/4 to 2008/9 six-year averages, among
the Mediterranean basin countries the largest production increases took place in Egypt,
where production almost tripled (+178%), in Libya (+91%), in Lebanon (+85%), in Iran
(+60%), in Morocco (+50%), in Tunisia (+47%), in Algeria (+41%) and in Jordan (+38%).
If we compare the same periods for non-Mediterranean basin, non- E.U. /27 countries,
the largest production increases took place in Australia (+790%), in Argentina (+137%)
and in the USA (+87%).
14
(Source: IOC)
Global production follows an ascending trend but the great influence of the two main
producing countries (Spain and Italy together command more than half of world
production) has introduced a high level of uncertainty in production levels. Indeed, the
fact that production in Italy and Spain changed much more than the one of the other
producing countries explains the high volatility of global production (Figure 6).
Consumption:
Although olive oil accounts for only about 3% of the world market in edible oil, it has
traditionally played a major role in oil and fats supply in the areas of production. Since
the 1990s, however, significant quantities of olive oil have also been consumed outside
those areas.
World consumption of olive oil has been progressing fairly steadily, without the
fluctuations typically observed on the production side. As for production, changes in
consumption are far from being uniform across countries.
The main consuming countries are also the main olive oil producers (see figure 7). In
2009, the European Union accounted for 65% of world consumption. With more than a
quarter of the world’s consumption, Italy is the largest consumer in the world. In 2009,
15
Mediterranean basin countries represented 73% of world consumption. The main
consuming countries outside the Mediterranean basin ones are in order: USA (9.16%),
Brazil (1.50%), Australia (1.32%), Japan (1.04%), Russia (0.63%) and Canada (0.60%).
(Source: IOC)
During the past 20 years there has been a resurgence of interest in olive oil as an
ingredient to flavour gourmet food and as a healthier alternative to other forms of fats
and oils in the U.S. diet. If we compare the 1991/92 to 1996/97 and 2003/4 to 2008/9
six-year averages, consumption in the USA has more than doubled (+117.35%).
Currently about 8% of all fats and oils consumed in the USA is olive oil. Because of its
large population, the USA ranks as third overall in world consumption of olive oil.
The evolution of production and consumption shows a slight growth from the 1970s to
the early nineties. In the mid-1990s there was a strong increase both in production and
consumption. Despite the production fall that came afterwards, consumption did not
decrease.
The strong correlation between European and world consumption curves explains the
significance of European consumption. However, the increasing divergence recently
16
observed between the two curves is the result of the emergence of new markets for
olive oil (Figure 8).
(Source: IOC)
Changes over time in per capita consumption of olive oil appears to be positively related
to changes in per capita income and negatively related to the starting value of per capita
consumption (the higher the change in per capita income, the higher the change in olive
oil consumption; the higher the starting level of olive oil consumption, the lower, ceteris
paribus, its increase over time).
International trade:
The main producing countries are also the main exporting countries as shown on the
graph below (Figure 9). Once again, the Mediterranean basin countries concentrate
more than 88% of total exports.
The old producing and consuming countries in the European Union (Spain, the first
producer, Italy, the first consumer, Greece and Portugal) have saturated markets, but
with a heavy trade among themselves; they also import products from outside the EU
17
area. In reality those countries do not need to import olive oil to cover an excess in
consumption over production (except for Italy) but marketing strategies from
manufacturing and trading firms result in very important and complex product flows.
Traditional low price countries that export towards that rich area include other countries
of the Mediterranean basin: Tunisia, Turkey, Syria and Morocco.
(Source: IOC)
Tunisia, the third largest olive oil exporter in the world, is the most important olivegrowing country of the southern Mediterranean region; over 30% of its cultivated land is
dedicated to olive growing (1.68 million ha).
If the European Union is excluded, Tunisia is the major world power in the olive oil
sector. And since the country’s consumption is well below its national production,
Tunisia is the 3rd largest net exporter of olive oil in the world.
18
(Source: IOC)
If you exclude the USA, olive oil imports are less concentrated by country than exports
(see figure 10).
The USA, the third largest consumer of olive oil, is the largest importer in the world
(44%). The domestic production being insignificant, imports have followed the increase
in consumption and have more than doubled over the last 10 years. According to the
IOC, the USA has imported 260,000 tons of olive oil during 2009/10 (crop year).
Italy, the largest exporter of olive oil in the world, is also the second largest importer.
Several countries act, at the same time, as exporters and importers of olive oil;
however, some of them, mainly Italy, do so to an extent which clearly implies arbitraging
activities, i.e. agents in these countries finding it profitable to re-export, after
manipulation (which may include blending it with other oils and bottling it) some of the
imported olive oil. Still Italy is a net exporter.
While this is not the case for Italy, in Spain olive oil imports show a great variability and
appear to be negatively related with domestic production; this may imply that imports by
Spain are mostly driven by the need of the domestic industry to fulfil a given annual
target in terms of volume of bottled/handled olive oil, with domestic production being
utilized first.
19
Brazil, the 3rd largest importer in the world, has no domestic production and is supplied
mainly by Argentina.
Chapter II: Olive development in Argentina
A. Agricultural development in Argentina
Agriculture is one of the bases of Argentina's economy. Argentine agriculture is
relatively capital intensive, today providing about 7% of all employment and, even
during its period of dominance around 1900, accounting for no more than a third of all
labour. Having accounted for 20% of GDP as late as 1959, it adds, directly, less than
10% today; however, agricultural goods, whether raw or processed, still earn over half
of Argentina's foreign exchange and, arguably, remain an indispensable pillar of the
country's social progress and economic prosperity.
Since its formal organization as a national entity in the second half of the 19th century,
the country followed an agricultural and livestock export model of development with a
large concentration of crops in the fertile Pampas, particularly in and around Buenos
Aires Province, as well as in the littoral of the Paraná and Uruguay Rivers.
The need for intensive agriculture was recognized as early as 1776; but, aside from the
yerba mate harvest in the northeast, attempts to develop it suffered setbacks due to
internal strife and lack of skill and machinery.
Agricultural development led to the first meaningful industrial growth, which, during the
1920s, was mainly centered on food processing and increasingly involved U.S. capital.
Agricultural exports provided the Argentine Treasury with generous surpluses during
both World Wars and helped finance a boom in machinery and consumer goods imports
between the wars and after 1945. The creation of a single grain purchaser (the IAPI) by
Pres. Juan Perón produced mixed results, often short-changing growers even as it
benefited them with investments in infrastructure, machinery and pest control.
Domestic austerity policies pursued by the last dictatorship and Raúl Alfonsín's
government led to record trade surpluses during much of the 1976-90 era, led by
agricultural exports and, notably, the sudden boom in soybean cultivation, which
displaced sunflower seeds as the leading oilseed crop in 1977. A severe shortage of
domestic credit hampered the sector somewhat, however, as growing harvests soon
outstripped transport and storage capacity.
20
A tie of the Argentine peso to the U.S. dollar implemented by economist Domingo
Cavallo in 1991 reduced export competitiveness somewhat, though the resulting
stability led to record investments in agricultural infrastructure and led to strong growth
in harvests during the late 1990s. These trends were accompanied by the federal
approval of GMO crops in 1995.
A devaluation of the peso in 2002 and a sustained rise in commodity prices since has
further encouraged the sector, leading to record production and exports, helping finance
record public works spending through export tariffs, a centerpiece of Néstor and Cristina
Kirchner's economic policies. These, in turn, became a point of contention when
President Cristina Kirchner advanced a hike in export tariffs, leading to the 2008
Argentine government conflict with the agricultural sector; the tariff increase was
defeated in the Senate when Vice President Julio Cobos cast an unexpected, tiebreakig vote against the measure.
In 2007, more than one fifth of Argentine exports of about US$56 billion were composed
of unprocessed agricultural primary goods, mainly soybeans, wheat and maize. A
further one third was composed of processed agricultural products, such as animal
feed, flour and vegetable oils.
B. Development of olive cultivation in Argentina
Background:
Olive orchards have been a part of the Argentine landscape since the Jesuit
missionaries first introduced olive oil plantations, with cuttings from Spain and Portugal,
in their attempt to settle the nomadic indigenous people. But, years later, when Spain
abandoned the missions, its king ordered the destruction of the orchards in order to
prevent competition with Spain and Portugal. However, according to the legend, the
indestructible olive tree prevailed.
In the 400 years since, different olive varieties cross-pollinated, resulting in a totally new
variety of the oil called Arauco (which has wild flavour character and intense fruity
notes). Other varieties now include Frantoio (with its green herbs and mild fruit balanced
with an agreeable spicy bitterness); Manzanilla (notes of herbs and fruits, primarily
apple peel and sharp spice) and Arbequina (softly sweet and mildly fruity).
Up until the 1930s, Argentina was a big consumer of olives and olive oil to satisfy the
tastes of those people still lingering from the colonial period. Changes in both
Argentina’s economy and the international olive oil market in the following decades
brought about a sharp reduction in the amount of land dedicated to the cultivation of
olive trees.
21
By the 1970s, an increase in the consumption of cheaper oil mixes such as sunflower oil
and corn oil combined with a discrediting campaign against olive oil due to its alleged
cholesterol content led to a decline in olive oil sales, with plantings removed in masses.
Trees were lost and fields abandoned.
For a long period olive oil was seen as a speciality product for high income consumers
and production levels remained below the country’s potential.
By the middle of the last decade, the dry season in the Mediterranean Area, and the
excellent world market conditions caused an increase in the international price of oil.
For Argentina, the new conditions on the international market combined with the
introduction of a vast industrial promotion program known as "Ley (Act) 22.021 (under
this program, companies and investors are granted a number of tax and duty
exemptions) laid the ground for a revival of the sector.
Before this change, there were 19,600 h planted with olive trees for commercial
development in Argentina, of which only 40% corresponded to varieties for oil
production.
At the beginning of the nineties, the main traditional production areas for oil olives
production were Rivadavia, in Mendoza, Cruz del Eje, in Cordoba and Great San Juan,
in San Juan. Together those 3 provinces were accounting for almost 80% of the total
cultivated area for olives in the country (23,500 ha out of a total of 29,600 ha of
traditional plantations).
The varietal offer was not very precise and shipments with many different qualities,
varieties and ripeness degrees were the commoner.
Due to its lower sale’s value, the oil olive harvest was linked to the table olive offer. In
general, when there was a lack of labour, table olives rather than oil olives were
harvested, while the oil olive remained in the plant for longer periods of time and lost its
industrial quality.
The principal varieties planted in the traditional regions were Farga and Frantoio in
Mendoza, Frantoio and Arbequine in San Juan and Arbequine and Nevadillo in
Cordoba.
In 1982 the government of Argentina introduced a vast industrial promotion program
known as "Law 22.021". This ambitious program encouraged new investment projects
involving modern technologies and brought an accrued process capacity. It also allowed
the entrance in the country of capital from the supermarket sector, financial companies,
etc. The purpose of the program was to reduce regional economic development
imbalances and the incentives were only available for the provinces or regions that were
22
lagging in terms of agricultural development. Act 22.021 favoured the capital settlement
in marginal areas by deferring tax payment. As a result new areas, such as the arid
valleys of La Rioja, Catamarca and San Juan, have been added to the traditionally
productive provinces (i.e. Mendoza, Cordoba and San Juan).
Without the tax incentive those new areas characterized by an annual pluviometry
inferior to 300mm, strong winds, important erosion and an absence of electrical and
road infrastructure couldn’t simply have been considered.
By the end of the nineties, Argentina had over 70,000 h of olive trees, of which 70%
corresponded to oil or double purpose varieties. Plantations which did not benefit from
the above mentioned law were also added.
Today, expansion projects are also under way in the Provinces of Rio Negro and San
Luis, among other regions.
The new plantations have mono-varietal patches of 330 plants/ha, watered by drip
irrigation, and the plants are being shaped for mechanical harvesting.
The geographical re-arrangement of the Argentinean production as a result of the
investment incentives can be summarized as followed:

an area comprised of the provinces of Catamarca and La Rioja characterised by
large investments in new industrial projects.

the province of San Juan with medium investments not always associated with
new industrial projects (because of pre-existing high-capacity industrial facilities

an area comprising the rest of the provinces and characterised by a traditional
production in the old plantations in which new technologies are introduced in
order to increase the capacity
Today the provinces of Catamarca and La Rioja, located in the northwest of the country,
represent the main producing region for olives (accounting for 54.5% of the total
cultivated area) along with the provinces of Mendoza and San Juan (accounting for
34.2% of the total cultivated area).
It is necessary to draw attention to the differences between existing or traditional
production and the new forms that have emerged in recent years: modern plantations
are characterized by high capacities and more sophisticated management techniques.
The technological change implied a significant increase in the grinding capacity and a
change in the type of process. The new oil factories have an average grinding capacity
of 100 ton/day, and nearly all correspond to the two phase extraction system (ecologic
system).
23
The introduction of modern technology resulted, among other things, in an increase in
estimated mean yields from 5-6 tons /hectare to 10-12 tons / hectare (1 hectare= 2.4710
acres).
On a varietal point of view, around 50% of Argentina’s olive production is now
comprised of the Arauco variety. The other most common varieties in Argentina are:
Arbequina, Frantoio, Leccino, Cornicabra, Farga, Ascolano, Empeltre, Changlot Real,
Sevillana Fina, Sevillana Gordal and Cerignola.
The total number of varieties available in the country either from Spanish or Italian origin
is around 40.
The varieties used in the new plantations are the ones most demanded on the
international market: Manzanilla for table olives and Arbequina, Frantoio and Picual for
oil olives.
Production and capacity:
Argentina is the largest producer of olive oil in the Americas. Table olive production is
higher than oil olive production as it is the case in the rest of South America.
During the nineties the Argentinean production of olive oil has reached an average of
9,000 tons/year.
Olive growing in Argentina dates back from the time of the Spanish colonisation. Since
then, it has gone through periods of expansion and contraction. Crop area increased
significantly in the 1990s, stimulated by government incentives to encourage the influx
of foreign capital to the regional economies. Cultural practices have progressed
considerably and new varieties have been introduced to produce quality olive oils and
table olives. The provinces that have seen the biggest expansion are Catamarca, La
Rioja and San Juan, which make up the national olive-growing map, alongside the
provinces of Córdoba, Mendoza and Buenos Aires.
Development projects are currently underway in the regions of Río Negro and San Luis.
An area of 90 100 ha was under olives in Argentina in 2008, 70% of which was irrigated.
More recently, both olive oil and table olive activity has increased significantly, placing
Argentina higher up in the world producer ranking. Olive crop area in Argentina is
expected to reach 105 000 ha by 2012.
Argentina is America’s top producer of olive oil. In 1990/91, it produced only 8 000 t but
by 2007/08 Argentinean production had reached a record 25 000 t. The same trend is
evident on the table olive market where production has climbed from 30 000 t in
1990/91 to 95 000 t in 2007/08.
24
According to official information, olive oil and table olive production is expected to
double over the next decade.
Socio-economic importance:
Argentina severe economic crisis (1999-2002) has highlighted the importance of the
agricultural industry as an indispensable pillar for the country's social progress and
economic prosperity.
Having accounted for 20% of GDP as late as 1959, agriculture now adds directly less
than 10% today. However, agricultural goods, whether raw or processed, still earn over
half of Argentina's foreign exchanges.
With a GDP forecasted to increase by over 50% by 2012, the potential for agriculture to
further drive growth in the country is enormous.
Compared to other, more heavily populated regions of the world - notably Asia - Latin
America and the Caribbean still has considerable potential for agricultural development.
A far greater proportion of the land, including potentially cultivable areas, remains under
forest, and for most countries average freshwater supply is satisfactory at more than
5,000 cubic metres per person per year.
Moreover Argentinian agriculture has an enormous potential of development in terms of
the amount of land that is actually cultivated. In 2008, out of 133 million of hectares of
agricultural area only 33 million hectares (25%) were under production (total cropland).
According to Fischer (International Institute for Applied Systems Analysis), 80% of the
reserves of potential farm land outside of forests (949 million ha) are concentrated in 7
African and Latin American countries: Angola, Democratic Republic of Congo, Sudan,
Argentina, Bolivia and Colombia (Fischer et al., 2002, according to 1995-1996 satellite
imagery).
25
Table 3 – Area cultivated
Argentina
South
America
World
132,850
580,917
4,883,698
33,000
127,283
1,526,758
827
331
226
12.06%
7.25%
11.74%
Total land area (1000 Ha)
273,669.00
1,756,239.20
13,003,469.20
Population (1000)
39,883
384,892
6,750,057
Agricultural area (1000 Ha)
Total cropland (Arable land and permanent
crops) (1000 Ha)
Hectares of total cropland per 1,000
population
Arable & permanent cropland as a percent of
total land area (1000 Ha)
(Source: FAO database)
The olive production industry:
The olive production industry comprises mainly two industrial sub-sectors –table olives
and olive oil production- that are highly relevant for regional economic growth and
development in Argentina. Both activities share the same raw material, 60% of which is
used for olive oil production, with the remainder being allocated to table olives. This
ratio is a function of several factors, including the supply of varietals and product prices
in the international marketplace.
Most indicators in this business have improved in recent years, both for table olives and
for olive oil, thus allowing Argentina to improve its market share and its positioning as a
global producer. According to the latest data, world production of olive oil for 2009/10 is
expected to top 3,100,000 t, the second biggest harvest ever recorded after the all-time
high of 2003/04.
According to the data published by the International Olive Council (IOC), world
production of table olives is expected to reach 2,088,000 tons (estimated number for the
2009/10 crop year).
In the last decade, olive oil and table olives production increased 14.4% and 67.5%
respectively. The remarkable performance of the olive growing sector in connection with
26
table olives and olive oil production enabled the improvement of Argentina’s share and
positioning in world production.
Argentina is the largest producer of olives in the Americas (see table 4), though the
momentum the sector (especially olive oil production) has gained in other countries
such as Peru and Chile is also worth underscoring.
Table 4 - Top olive producers in the Americas (2005-2008) (in tons)
Argentina
USA
Peru
Chile
Mexico
El Salvador
Uruguay
Brazil
2005
155,000
128,820
54,622
27,000
13,014
3,500
3,250
5
2006
170,000
21,320
52,298
27,500
9,642
3,500
3,250
5
2007
160,000
120,200
52,444
27,500
15,936
3,500
3,400
1
2008
150,000
60,600
57,700
27,500
15,936
3,500
3,400
1
(Source: FAO database)
According to the provisional data for the crop year 2008/09 released by IOC, Argentina
will account for 4.4% of the world production of table olives and for 0.86% of the world
production of olive oil.
These figures will position Argentina in the 8th and 11th place, respectively, in the
world’s ranking for table olives and olive oil production (see table 5).
27
Table 5 - World production of table olives and olive oil (2008/09 crop year)
Table olives
Olive oil
Rank
Country
Production
(1,000 t)
Share of
world
production
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
Spain
Egypt
Turkey
Syria
Algeria
Greece
Morocco
Argentina
Italy
Lebanon
U.S.A.
Iran
Jordan
Tunisia
Israel
Palestine
Portugal
Albania
Cyprus
Libya
Australia
France
Croatia
484.9
440.0
300.0
120.0
106.5
105.0
100.0
95.0
63.8
52.5
48.0
30.5
27.0
18.0
16.5
13.0
13.0
7.0
3.3
3.0
2.0
1.6
1.5
22.24%
20.18%
13.76%
5.50%
4.89%
4.82%
4.59%
4.36%
2.93%
2.41%
2.20%
1.40%
1.24%
0.83%
0.76%
0.60%
0.60%
0.32%
0.15%
0.14%
0.09%
0.07%
0.07%
C.E./27
671.6
30.81%
Total
World
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
2180.0
Total
Country
Production
(1,000 t)
Spain
Italy
Greece
Tunisia
Syria
Turkey
Morocco
Algeria
Portugal
Lebanon
Argentina
Palestine
Jordan
Australia
Libya
Israel
France
Croatia
Albania
Egypt
Iran
Cyprus
U.S.A.
Slovenia
1028.0
540.0
305.0
150.0
130.0
130.0
85.0
59.0
49.0
24.5
23.0
20.0
18.5
16.0
15.0
8.0
7.0
6.0
5.5
5.0
4.5
3.5
2.5
0.5
C.E./27
1933.0
World
2665.5
Share of
world
production
22.24%
20.18%
13.76%
5.50%
4.89%
4.82%
4.59%
4.36%
2.93%
2.41%
2.20%
1.40%
1.24%
0.83%
0.76%
0.60%
0.60%
0.32%
0.15%
0.14%
0.09%
0.07%
0.07%
72.52%
(Source: IOC)
Transformation of the olive oil processing sector:
The olive oil extraction sector has seen a significant transformation characterised by the
introduction of modern technologies.
The technological change has brought a significant increase in the grinding capacity
and a change in the type of process. The new oil factories have an average grinding
capacity of 100 tons/day, and nearly all of them use 2-Phase system decanters that
28
were introduced in the early 1990's (They function under the same principle as 3-Phase
decanters except that the solid and fruit-water exit together. No water needs to be
added to the 2-Phase system).
As a whole, 2-phase or 3-phase decanters represent 60% of the total capacity and
correspond to units with a grinding capacity between 25 and 100 tons per day.
In terms of regional distribution, at the beginning of the 90’s almost 60% of the available
capacity was in Mendoza, while it is presently evenly distributed between the provinces
of Mendoza, Catamarca, La Rioja and San Juan.
With the addition of new modern facilities in recent years, the greater capacity available
for raw material guarantees that olives will be ground within 24 hours of reception.
The addition of new technologies resulted, among other things, in an increase in
estimated mean yields from 5-6 tons /hectare to 10-12 tons / hectare (1 hectare= 2.4710
acres).
The national production has two main advantages: the counter season and the
possibility of producing big quantities of quality virgin oil that can be classified by variety.
Another important change at industrial level is the quality of the finished product.
Until the beginning of this decade the main export destination was the Mercosur
Countries characterized by consumers who would accept an oil with sensorial flaws. But
with the emergence of new markets the Argentinean industry began to make different
products, responding to the demands of “new consumer” countries. In general these
new products were flawless medium to mild fruited virgin oils.
Internal consumption:
The internal consumption of olive oil (200 to 220 g/per capita/year) is insignificant
compared to the internal consumption of seed oil (12 L/per capita./year). However, the
Argentinean consumption of olive oil tends to grow: In 1990 the consumption was only
60 g/per capita/year. The low consumption is the result of the discrediting campaign that
began in the 70’s and whose effects are still being felt.
15% of the domestic olive oil consumption corresponds to bottled olive oil foreign in
origin (Spain and Italy). Glass bottles of 500 cc represent 80% of the domestic
consumption. Olive oil consumption at restaurants has increased over the past years.
There are over 80 companies devoted to olive oil extraction in the country, many of
which have recently entered the trade circuit.
29
As new plantations were entering the productive circuit an alternative to “à façon”
production appeared: the producers deliver the raw material and in exchange receive a
portion of the oil obtained.
There are over 90 trademarks, among producing and fractioning companies. The
leading trademarks in retailing distribution are: Lira, Cocinero, Mazzola, San Juan de los
Olivos and Oleovita. There is a wide variety of trademarks in the direct sale to
restaurants and shops.
Until 2 years ago, 60% of the market was supplied by companies which fractioned oil
without being producers themselves. The most important were Molinos Río de la Plata
with Lira and Cocinero, and Refinerías de Maíz with Mazzola.
In the past years, some of the most prestigious national trademarks have changed
owners: Titarelli, Otoyan and Setubal, Yancanello, Mazzola and Copisi.
Foreign trade:
Exports:
Olive oil exports:
The increase in Argentinean olive oil production and the stable balance with low internal
consumption has favoured an increase in the country’s exports.
According to the final numbers published by the IOC for the 2007/08 crop year (1st
October 2007 – 30th September 2008), Argentina was the 6th largest exporter of olive oil
in the world.
In the last decade (2009 versus 2000) Argentina’s olive oil export towards the rest the
world have increased 305% in terms of volume (measured in kg) and 271% in terms of
trade value (measured in US$).
In 2009 Argentina’s total exports have reached 18,951 tons in volume (highest historical
value) and US$ 62.2 million in FOB value (the highest value was reached in 2007 with
US$ 65.09 million).
30
Table 6 – Argentina: olive oil exports (2000-2009):
Trade value
Net weight
(in million)
(in 1,000 tons)
2000
$23.12
6.21
2001
$12.70
3.80
2002
$17.00
5.65
2003
$20.23
8.26
2004
$18.01
5.25
2005
$56.04
15.83
2006
$58.55
14.83
2007
$65.09
18.24
2008
$64.49
15.63
2009
$62.62
18.95
Increase 2000-2009
270.88%
305.09%
Year
(Source: UN Comtrade)
In 2000, exports of olive oil other than virgin represented 82.42% of the total trade value
(expressed in $US) and 81.88% of the total volume of exports respectively. Virgin olive
oil exports represented only 17.58% of the total trade value and only 18.12% of the total
volume of exports respectively.
As it was mentioned previously, the national production started to shift towards a
production of high price/high quality products and by 2003 the trend had been reversed:
exports of virgin olive oil had surpassed the exports of oil other than virgin both in terms
of volume and in terms of value (see figure 13).
In 2009, virgin olive oil exports represented 94.6% (in terms of trade value) and 94.51%
(in terms of volume) of the country’s total exports in olive oil. Exports of olive oil other
than virgin represented only 5.4% of the total trade value and 5.49% of the total volume
of exports respectively.
31
(Source: UN Comtrade)
The number of olive oil exporting companies has increased significantly in the last
decade. In 2006, 102 companies participated in the business, almost five times the
number of companies (22) that operated in 1997.
Destination of olive oil exports in 2009:
In terms of destination of olive oil exports, sales to the United States showed an
important increase in the last decade, and this country became one of Argentina’s main
buyers together with Brazil (see figure 12).
32
(Source: UN Comtrade)
In 2009, Argentinean olive oil was exported to 38 countries, Brazil was ranked first in
terms of dollars and second in terms of quantities, the USA was ranked second in terms
of dollars and first in terms of quantities (see figure 13 & 14).
The US main suppliers of olive oil are Italy, Spain and Greece. But over the last 10
years, Argentina’s share in the US imports of olive has steadily increased. Still, the US
continue to import a larger portion of higher price/higher quality oils from those
European countries which explains why exports towards the US are lower in value than
exports towards Brazil.
33
(Source: UN Comtrade)
(Source: UN Comtrade)
34
It should also be noted that from 2000 to 2005, exports to important olive production
markets like Italy and Spain have increased sharply but by 2009 they had receded to
their original level in 2000.
From a trade value of $406,554 and $6,912 in 2002, exports to Italy and Spain peaked
in 2005 at $5,741,861 and $8,199,242 respectively. By 2009 exports to Italy and Spain
had gone down to $432,536 and $586,733 respectively.
At their peak in 2005, Argentina’s exports to Spain represented 14.63% in terms of
trade value and 14.09% in terms of volume respectively of the country’s total exports.
By 2009, exports to Spain had fallen down to 0.94% in terms of trade value and 0.97%
in terms of volume of the country’s total exports.
Exports to Italy went from 10.25% in trade value and 9.72% in volume of the country’s
total exports in 2005 (at their peak) to 0.69% in trade value and 0.85% in volume of total
exports in 2009.
Table olive exports:
In 2009, Argentina’s exports of table olives reached $114.2 million in trade value (11.11% compared to 2008) and 80,055 tons in volume (+8.57% compared to 2008).
From 2000 to 2009, Argentina’s exports of table olive grew 124% in trade value and
132% in volume.
During the same period the constant annual growth rate (CAGR) was 9.37% in trade
value and 9.79% in volume.
In 2009, the average price $1.43/kg, an 18.12% decrease compared to 2008.
35
(Source: UN Comtrade)
Table olive exports consisted mainly of table olives in brine: in 2006, 81.8% of the
exports of table olive in trade value corresponded to this product.
The number of table olives export companies increased significantly over the last ten
years. In 2006 around 102 companies participated in the business compared to 68 in
1997.
36
Table 8 – Argentina’s table olive exports (2000-2009)
Period
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Constant
Annual
Growth
Rate
(CAGR)
Trade
value
(million
$US)
(1)
51.00
38.15
31.98
32.41
58.86
75.42
93.25
120.74
128.52
114.24
Annual
change
-25.19%
-16.18%
1.35%
81.61%
28.13%
23.65%
29.48%
6.44%
-11.11%
Volume
(1000 tons)
(2)
34.53
31.61
38.52
47.85
55.11
61.20
81.12
90.75
73.74
80.06
9.37%
Annual
change
-8.45%
21.83%
24.24%
15.17%
11.04%
32.55%
11.88%
-18.75%
8.57%
Annual
average
price
(1)/(2)
$1.48
$1.21
$0.83
$0.68
$1.07
$1.23
$1.15
$1.33
$1.74
$1.43
Annual
change
-18.29%
-31.20%
-18.42%
57.69%
15.39%
-6.71%
15.73%
31.00%
-18.12%
9.79%
(Source: UN Comtrade)
Destination of table olive exports in 2009:
Exports were shipped to 31 destinations in 2009. Brazil ranked first, with imports
reaching 58,398 tons (73% of Argentina’s total exports) and US$ 76.5 million FOB in
trade value (67% of Argentina’s total exports), thus continuing with the current trend
(since 2000).
The USA ranked second, with imports reaching 12,387 tons and US$ 35.2 million FOB.
This market accounts for 29.2% in value terms and 24.6% by volume, and shows an
increase as against 2006.
37
.
(Source: UN Comtrade)
(Source: UN Comtrade)
38
Imports:
In 2009, table olives and olive oil imports expressed in volume declined by 25.97% and
50.96% respectively compared to the previous year. Imports expressed in dollar value
reflect the same trend and show a decline of 48.31% for table olives and 39.34% for
olive oil compared to the previous year.
In 2009, olive oil imports reached 57.7 tons for a total value of US$ 424,775. Since
2006, Spain is Argentina’s main supplier of olive oil (2009: 58.61% of all imports in trade
value and 60.73% of all imports in volume).
In 2009, the other 3 main suppliers were Italy (37.56% in trade value and 36.52% in
volume), Lebanon (2.08% in trade value and 2.08% in volume) and the USA (1.47% in
trade value and 0.59% in volume).
(Source: UN Comtrade)
39
(Source: UN Comtrade)
(Source: UN Comtrade)
40
Imports have fluctuated greatly over the last 15 years. Those fluctuations are mainly
due to the protectionist measures introduced in order to protect the local industry from
the competition of olive oil coming from the European Union.
To this end, in 1998 Argentina established compensatory rights for olive oil imported
from European Union countries because those countries are subsidizing their olive oil
industry.
When those compensatory rights matured, the Ministry of Economy of Argentina issued
Resolution 823/2006, which established a common external tariff for olive oil.
Since October 31, 2006 there is a 31.5% tariff for the following commodities:
1509.10.00 –virgin olive oil-, 1509.90.10 –refined olive oil-, 1509.90.90 –olive oil-.
In this context, imports were additionally affected by the evolution and development of
the olive growing sector in Argentina.
The origin of imports was modified in this decade. In 1997, 96.2% of total volume of
olive oil imports and 93.2% of its value in dollars corresponded to Spain. However, this
market share fell in 1998, after compensatory rights were applied to olive oil from the
European Union.
After that year, imports of olive oil produced by Turkey increased and from 2000 to
2005, Turkey was Argentina’s main supplier of olive oil.
In 2006, Spain regained its first place among Argentina’s suppliers of olive oil.
Like olive oil imports, table olive imports have fluctuated greatly over the last 15 years
(see figure 21 & 22).
In 2009, table olive imports reached 190,280 kg for a total value of US$ 196,760. Since
2000, Chile and Spain are Argentina’s main supplier of table olives.
In 2009, Chile was Argentina’s main supplier of table olives with imports reaching US$
111,800 in trade value (56.82% of all table olive imports) and 165,002 kg in volume
(86.72% of all table olive imports)(see figure 23 & 24).
41
(Source: UN Comtrade)
(Source: UN Comtrade)
42
(Source: UN Comtrade)
(Source: UN Comtrade)
43
Conclusion:
Olive oil is possibly the single globally consumed and traded product most closely linked
to the
Mediterranean basin: in 2009/10, non-Mediterranean basin, non- E.U. /27 countries,
account for only 2.43% of the world’s production.
The olive oil market is very complex: production is spread over developed and
developing countries and is realized through very different production systems, even
within a single country;
olive oil is produced regionally but traded globally; crushing activities are dispersed,
while bottling has become more and more concentrated, with a strong presence of
multinational firms; however, at the same time, branding by small bottlers with effective
marketing strategies is proving profitable (similarly to what has been observed, on a
different scale, in the wine industry); olive oil consumption is growing, but consumption
patterns vary widely, both in quantity and quality; market segmentation is the norm; in
some countries and for some consumers (the better off and more educated) quality
product attributes have come to assume an increasingly important role in consumption
decisions; the largest producer and consumer of olive oil, the European Union (EU),
tenaciously protects its domestic market, despite the preferential access it grants to a
number of Mediterranean countries; some large exporters are large importers as well,
and there are also exporters that produce no olive oil at all; finally, the olive oil market is
characterized by many conflicts of interest, vertically as well as horizontally along the
“chain”, domestically as well as between actors of different countries.
There are two main elements to consider in international olive oil production and
market: the production growth and the consumption development which are determined
by different factors, namely strategic national policies, farms' investments, new
consumers, new consumers' needs and knowledge about diet and health.
During the last ten years, supply has often been greater than demand and this surplus
has been a source of worry for the producers, but at the same time a great incentive to
push selling activities because consumption has, however, grown.
According to the estimates received from a number of IOC member countries, olive oil
production in 2010/11 could be slightly higher than the season before provided weather
conditions remain favourable. Among EU producers, Spain expects to produce
1,400,000 tons, almost on a par with the year before, while Greece expects production
to reach 336,000 tons (+5%) and France 6,000 tons. Elsewhere, production could climb
the most in Israel (9,000 tons=+157%), Algeria (60,000 tons = +126%), Iran (8,000
tons= +50%) and Albania (7,000 t = +40%). Conversely, the estimates for Tunisia point
to a 20% drop in production to 120,000 tons. These record-setting levels of production
are a growing concern among international olive growers because since January 2005,
as global output of olive oil has continued to soar, worldwide farm-gate prices have
continued to decline.
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Argentina is America’s top producer of olive oil. In 1990/91, it produced only 8,000 tons
but by 2007/08 Argentinean production had reached a record 25,000 tons. The same
trend is evident on the table olive market where production has climbed from 30,000
tons in 1990/91 to 95,000 tons in 2007/08.
According to official information, olive oil and table olive production is expected to
double over the next decade.
According to estimates, olive oil production in Argentina is expected to reach 17,500
tons (+9%) in 2010/11. The data the IOC has received for Argentina do not yet provide
a clear snapshot but table olive production in this country may rise quite significantly as
there appears to be a move towards switching from oil-olive production to table olive
production owing to the low oil content of some varieties.
As a much larger producer than Australia among non-traditional producing countries,
Argentina has the potential to further increase its olive oil output: the country has an
incredible potential in terms of available land suitable for olive development and benefits
from a counter season against the traditional producing countries. In order to increase
its share and its profitability on the worldwide olive oil market, Argentina will have to
focus on high quality/high price products like Extra Virgin olive oil (EVOO). In order to
achieve this goal, Argentina will have to:



Renew technical processing plants to insure better quality
Improve harvesting, delivery time and processing procedures
Implement a modern system of quality control and production procedures in
order to meet international standards
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ANNEXES
Annex I: IOC standards
International Olive Council (IOC) standards: TRADE STANDARD APPLYING TO OLIVE
OILS AND OLIVE-POMACE OILS
1. SCOPE
This standard applies to olive oils and olive-pomace oils that are the object of
international trade or of concessional or food aid transactions.
2. DESIGNATIONS AND DEFINITIONS
2.1 Olive oil is the oil obtained solely from the fruit of the olive tree (Olea europaea L.),
to the exclusion of oils obtained using solvents or re-esterification processes and of any
mixture with oils of other kinds.
2.2 Virgin olive oils are the oils obtained from the fruit of the olive tree solely by
mechanical or other physical means under conditions, particularly thermal conditions,
that do not lead to alterations in the oil, and which have not undergone any treatment
other than washing, decanting, centrifuging and filtration.
2.3 Olive-pomace oil is the oil obtained by treating olive pomace with solvents or other
physical treatments, to the exclusion of oils obtained by re-esterification processes and
of any mixture with oils of other kinds.
3. ESSENTIAL COMPOSITION AND QUALITY FACTORS
3.1 Extra virgin olive oil: virgin olive oil with a free acidity, expressed as oleic acid, of not
more than 0.8 grams per 100 grams and whose other characteristics correspond to
those laid down for this category.
3.2 Virgin olive oil: virgin olive oil with a free acidity, expressed as oleic acid, of not more
than 2.0 grams per 100 grams and whose other characteristics correspond to those laid
down for this category.
3.3 Ordinary virgin olive oil: virgin olive oil with a free acidity, expressed as oleic acid, of
not more than 3.3 grams per 100 grams and whose other characteristics correspond to
those laid down for this category1.
3.4 Refined olive oil: olive oil obtained from virgin olive oils by refining methods which
do not lead to alterations in the initial glyceridic structure. It has a free acidity, expressed
46
as oleic acid, of not more than 0.3 grams per 100 grams and its other characteristics
correspond to those laid down for this category.
3.5 Olive oil: oil consisting of a blend of refined olive oil and virgin olive oils suitable for
human consumption. It has a free acidity, expressed as oleic acid, of not more than 1
gram per 100 grams and its other characteristics correspond to those laid down for this
category2.
3.6 Refined olive-pomace oil: oil obtained from crude olive-pomace oil by refining
methods which do not lead to alterations in the initial glyceridic structure. It has a free
acidity, expressed as oleic acid, of not more than 0.3 grams per 100 grams and its other
characteristics correspond to those laid down for this category.
3.7 Olive-pomace oil: oil consisting of a blend of refined olive-pomace oil and virgin olive
oils. It has a free acidity, expressed as oleic acid, of not more than 1 gram per 100
grams and its other characteristics correspond to those laid down for this category.
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Annex II: Case study: Cooperativa Olivicola Los 12 Olivos ltda.
Brief summary
In May 2009, through the intervention of the program “Cambio Rural” promoted by INTA
(Instituto Nacional de Tecnologia Agropecuaria), the group OLIVOS DEL VALLE is
founded with the participation of 12 members in the department of Capayán, specifically
in the colonies´zones of del Valle y Nueva Coneta. Their plantations hold between 4
and 15 ha seizing together a total area of 110 ha, that are not under production, having
190 ha available for future plantations. It should be mentioned that the group members
are the landowners.
Mostly, the plantations have been implanted with table olive varieties to be preserved or
canned, typically Manzanilla, and other olive oil varieties, more often Arbequina. These
plantations are two and three years old. The plantation frame normally used is 8 x 5 for
the table olives and 8 x 4 for the olive oil varieties.
The irrigation system is fed from Las Pirquitas dam and conducted through the coated
canal. In the colonies, the system continues through canals. The properties in the
parcel seat have a faucet and from this point the crops are irrigated by floods through
ditches. Only one producer of the group possesses drip irrigation. It should be
mentioned that on the whole, there are dams for storage of irrigation in the parcels.
Producers take turns for irrigating and turns change among the group members.
30% of the group members devote themselves only to agricultural activities (in addition
to the olive cultivation, they are involved in horticulture, alfalfa and citrus cultivation).
The rest of the members involve themselves in activities other than agriculture.
The crops of table olives cover an area of around 83 ha. The area covered for the
production of olive oil reaches 27 ha. In the current campaign, the harvest attains
around 25 000 kg of olives for the production of olive oil that have been processed in
INTA and in private companies of the zone. For the next campaign, the estimated
production calculates 50,000 kg of olives for the production olive oil.
As time went by, the group grew solidly not only in confidence among the members but
also in technical knowhow. There were offered conferences for fertilization, plagues
and illnesses and a theoretic and practical course about the production of table olives
dealing with organizational functions. Work and effort to establish the agricultural
cooperative (co-op) has been done, starting with training courses and the edition of the
articles of association. All this work yields results, since in June of this year, all
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procedures required by the provincial office of cooperative action have been completed.
Now, the file has been transferred to INAES (instituto Nacional de Asociativismo y
Economía Social), Buenos Aires, to obtain the corresponding license and registration.
The name of the co-op is LOS 12 OLIVOS.
The plans for the future are to improve the technological level of the olive cultivation, the
production of olive oils and table olives, to adopt quality norms and a brand possession.
In this campaign in particular, the need to work as a team has been acknowledged,
since the best conditions for the logistics of collection and transportation of fruits to the
production plants have not been set forth. Industrial plants will send trucks and
containers to transport a small producer’ crop when he has gathered a certain volume of
the fruit. On the contrary, the small producer will transport his crop by himself, or would
harvest and stock up the product in the field till attaining the necessary amount to justify
the truck delivery. As a result, the quality of the end product could be decreased. Small
producers could also bring the olives for grinding to INTA, but the machinery has low
capacity and the problem is temporarily solved. The situation worsens when the big
olive production companies start their harvest and all the logistic force is directed to
them.
The machinery park consists of tractors and weed cutters noticing a lack of machinery
for the protection of the crop up to a 90% in most of the cases. The tasks mostly done
are weed removal, ants control and herbicides application. Neither basic fertilization nor
maintenance fertilization is done.
The management of a company involved in livestock and agriculture is deficient since
there is no planning even at a rudimentary level. There is no data collection and as a
result there are no economic indicators measured in accordance with a situation in
particular.
In the course of 2010, contacts were established between the National University of
Catamarca and this Cooperative which resulted in the Cooperative becoming a partner
which will be involved in all the activities of the project. The association of this group of
olive farmers to the project is very important, as it will serve as an example for the
recruitment of other cooperatives and groups of olive growers so that the direct
dissemination of project results to the stakeholders will be effective and as wide as
possible.
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Annex III: Bibliography
1. Tagarelli, A.S. 2008. Olive Production. Argentinean Foods Magazine. 41: 14-18
2. Tagarelli, A.S. 2010. Olive Production. Argentinean Foods Magazine. 47: 32-35
3. Marginet Campos J.L. 2008. Office of Agriculture, Livestock, Fishing and Foods.
Food National Department. http://www.sagpya.gov.ar/alimentos
4. International Olive Council (ICO), 2009.
http://www.internationaloliveoil.org/
5. RENATRE: National Registry of Rural Employees and Employers, 2009.
http://www.renatre.org.ar
6. Ministry of Agriculture, Livestock and Fishing, 2009. Argentina. Office of
Agriculture, Livestock and Fishing.
http://www.minagri.gov.ar
7. Ministry of Production of Catamarca. Socio-productive Regionalization Document
of Catamarca.
http://www.produccioncatamarca.gov.ar
8. Argentinean Alimentary Code, 2003. De La Canal y Asociados S.R.L. Volume I –
A Chapter VII: 161 – 166.
9. IRAM NORM 5523:2008. Edible Vegetable Oils. Olive Oil. Requirements. 2008.
1-22 pp.
10. Quality Seal: Argentinean Foods, A Natural Choice, 2009. Ministry of Agriculture,
Livestock and Fishing. http://www.minagri.gov.ar
11. Institute of Agronomic Research of Jaén. Determine the Moment to Harvest the
Olive. http://www.juntadeandalucia.es/medioambiente
12. Food and Agriculture Organization of the United Nations (FAO) database.
http://faostat.fao.org
13. UN Comtrade database. http://comtrade.un.org/
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