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New Report by Deoleo: 20% of the Spanish olive grove is at risk of abandonment

New Report by Deoleo: 20% of the Spanish olive grove is at risk of abandonment

2019/23/05 - More than 130,000 hectares of traditional non-mechanized olive groves are already in the process of being abandoned and more than 500,000 hectares could disappear in the next decade, according to the report "Save the good oil", commissioned by Deoleo and prepared by the international strategic consultant and olive oil analyst Juan Vilar.
This study indicates that in Spain, the traditional non-mechanized olive grove covers 500,000 hectares -that is, more than 20% of the total olive grove in this country- and 200,000 small farms (between one and three hectares each) of some 300,000 families in Andalusia, Castilla-La Mancha, Valencia, Catalonia and Aragon, which could disappear in the next 10 years.

The report notes that the sustainability of the Spanish olive grove, especially the traditional non-mechanized olive grove characteristic of this country, is in serious danger, especially due to the growing gap between production and consumption in Spain and worldwide, so there are some ways to address this situation through promotion.

In the opinion of the author of the study, "all the agents of the olive oil value chain must work to raise the quality standards and invest in the valorization of olive oil, which the consumer, especially the youngest, is abandoning in favor of substitute products." This would achieve the adequacy of demand and supply, and the corresponding shift of yield towards the source and greater profitability for the farmer. In parallel, initiatives to reduce costs (crop transformation, vertical or horizontal integration, etc.) and others aimed at increasing value (differentiation, specialization and singularization) should also be undertaken.

This study also concludes that the international productive sector of olive oil is growing at a faster rate than consumption.

Specifically, during the last 15 years, it has gone from 46 to 64 producing countries, and 1.65 million hectares of olive groves have been planted on the planet -10 new olive trees per second-, which represents an increase of 17% of the cultivated area. This expansion has been concentrated mainly in the last six years, with 1 million new hectares, 10% of the world's additional area, mostly of efficient olive groves.

This increase in the cultivated area, together with the annual transformation of more than 100,000 hectares of traditional olive groves into efficient, has as a direct consequence an increase in the nominal productive capacity of the olive grove worldwide, which currently exceeds 4.9 million tons of oil of olive (in absolute terms).

However, according to the forecast of the International Olive Council (IOC), in the last season consumption amounted to 2.9 million tons, which represents a global consumption loss and an accumulated fall of 5.1 percentage points during the last nine seasons, falling in the main consumer and producer countries (such as Spain) and slowing down in new consumer countries, such as the United States.

In this sense, the report highlights that in the coming years the gap between supply and demand of olive oil will increase, and there will be a production excess of between 1 and 2 million tons.



Traditional Vs. high-density olive grove

This gap causes pernicious effects in the traditional categories of olive groves, risking 20% of the Spanish olive grove to disappear, a sector focused on volume and "aggressiveness" in prices, to which we must add the drop in consumption. All of this with a greater negative impact on the sustainability of the traditional non-mechanized olive grove characterized by its atomization (240,000 small farms and 300,000 families). The productive costs per kilo of olive oil per type of crop range between 0.80 euros for high-density farms and 2.40 euros/kg. on average (sometimes up to 3 euros) for traditional farms, on high slope and not machinable farms, which places them below the profitability threshold.

As a result, according to the study, more than 130,000 hectares of this type of olive grove -unique and very characteristic of Spain, which use native varietals, adapted to their climates and soils, with a differential organoleptic profile and exclusive properties of olive oils that, in another case- are already in the process of being abandoned.

In statements to Mercacei, the author of the study believes that traditional olive grove should use strategies of singularization and differentiation and promote a higher price for this product that guarantees a greater net income to the olive grower in origin. Among the clear examples of this type of strategy is, according to Juan Vilar, organic olive growing, bioregenerative olive growing, biodynamic olive growing, heroic oliviculture, singular oils, etc.
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