What is the situation of the olive grove and olive oil sector in Portugal?
The evolution of the last few years has been remarkable. Production has multiplied 5 times since the beginning of the 21st century and exports currently represent 12 times more than at that time. The sector has changed a lot, and today it is one of the most modern and dynamic sectors of the national agriculture. Portugal is currently the sixth largest producer in the world, with an olive grove area of around 380,000 hectares and an average annual production of 150,000 tons of olive oil, but the sector continues to grow from year to year. Approximately 90% of the production each year is of extra virgin quality, which makes Portugal the country that produces the largest percentage of the highest quality olive oil in the world.
75% of the olive grove area is still traditional, rainfed olive groves, with their traditional varieties, which represents a challenge, but also an opportunity to maintain the authenticity and differentiation of Portuguese olive oil.
Olive oil consumption in Portugal remains stable at around 6.5kg/per capita/year, with more than 75% of consumption being of extra virgin and virgin olive oils, with a large predominance of extra virgin oils.
What are the main olive varieties grown in Portugal and how are they evolving in recent years?
In Portugal we have dozens of traditional varieties of olive trees, but the most important are the Galega variety, which is found almost everywhere in the country, except in Tras-os-Montes (North) and the Cobrançosa, Cordovil, Verdeal and Madural varieties. These varieties remain more or less stable, and are the basis of the 6 protected designations of origin (PDO) that we have recognized in Portugal. They are also varieties associated with more traditional production systems, often rainfed.
But nowadays other foreign varieties are cultivated, mainly Spanish, but also Greek or Italian, such as the Arbequina, Arbosana and Koroneki varieties, mainly cultivated in the new intensive and hedgerow plantations in the south of Portugal. The Picual or Frantoio varieties are often found in intensive olive groves.
What are the forecasts for the current season, in terms of volume and quality?
For the current crop year, which is a safra season, production is estimated to be 20% higher than the previous year, for values of about 150,000 tons of olive oil. This value is below the potential production of the production capacity already installed in Portugal, essentially due to the effect of the drought, which affects very much the main olive oil producing regions, and especially the rainfed olive groves (which in Portugal still represent, still, about 75% of the olive trees area - although less than 25% of the total production).
In terms of quality, a high quality production is expected as in previous years, where an average of +/- 90% of extra virgin quality oil is produced in Portugal.
Intensive production in Portugal has contributed to the great revolution in olive growing in your country. How does this situation influence the evolution of production and the relationships between the different links in the chain?
Currently, about 85% of the national production comes from the intensive and hedgerow olive groves of the Alentejo region, which are responsible for all the recent development of the sector. Some companies have integrated the entire production process, and are today major players in the market, both in the production and sale in bulk, as well as in branded oil sales. I believe that relations with the different links in the chain are quite fluid, as these companies are often the main suppliers of the national and international industry. An important characteristic of the production in this region is its capacity to produce very early olive oils, of high quality, with strong international procurement and a good valorization.
How are Portugal's olive oil exports evolving in recent years?
In the last 20 years, national exports have grown 12 times in volume and 18 times in value. Currently, olive oil exports represent more or less 10% of the total exports of the agri-food complex, and contribute more than 500 million euros to the balance of the agri-food trade balance, which is very significant. The great challenge for the sector in the coming years is the valorization of these exports, that is, to add increased value, taking into account that about 66% of total exports are bulk exports.
What are the main challenges facing olive oil production today and in the future?
At present the panorama is very complex, not only in Portugal, but in all producing countries. The drought has taken a heavy toll, with productions in some of the world's main producers, such as Spain, dropping by about half in two consecutive seasons, and this has led to olive oil prices at origin as never seen before. Consumption is falling and this represents a serious problem for the future, when production recovers.
This situation highlights the importance of the question of water availability and the production model for the regularity of world production, even more so in a scenario of climatic changes that is already a reality. This regularity is vital for the development of the market, because it is what most conditions the evolution of olive oil prices, and without a more or less stable price the sector will find it very difficult to grow consistently for new markets and consumers. The loss of consumers due to high prices is much faster than their subsequent recovery, mainly in new markets without many consumption habits, and which often enter the category for health reasons.
How can the Congress help to further boost the sector in Portugal and contribute to its growth?
Information and knowledge is more and more fundamental every day. A congress like the OOWC, which brings together everything that is new in the world, be it market or technological and scientific knowledge, will surely have a very positive effect on the sector in Portugal. From Casa do Azeite we are committed to contribute as much as possible to the success of the Congress.