Mystery Behind High Lebanese Olive Oil Prices Solved

Lebanon is blessed with beau­ti­ful and fruit­ful land and a mild cli­mate that is per­fect for grow­ing olives and many other crops that help the nation’s econ­omy flour­ish.

However, these nat­ural fac­tors are not enough for the agri­cul­ture indus­try to flour­ish on its own and offer its work­ers a decent liv­ing: in addi­tion to favor­able nat­ural con­di­tions, the agri­cul­ture indus­try needs finan­cial sup­port from the gov­ern­ment in order to sur­vive and thrive. Unfortunately, the sup­port that the Lebanese olive oil indus­try needs from the gov­ern­ment has not been given, and it is con­se­quently suf­fer­ing severely.

According to Adel Oewis, an olive oil farmer and the head of the co-op in Zgharta, ​“The gov­ern­ment is totally absent when it comes to the agri­cul­ture sec­tor and namely olive oil… Lebanon is flooded with olive oil imported at a cheaper price from other coun­tries. What we want from the gov­ern­ment is to pro­tect our pro­duc­tion and also to secure export mar­kets for the oil we pro­duce.”

Lebanese farm­ers have asked the gov­ern­ment to pro­tect the local agri­cul­ture indus­try by stop­ping or restrict­ing the import­ing of items such as olive oil that are pro­duced locally. The head of the Lebanese Farmers’ Association, Antoine Howayek, expressed sim­i­lar sen­ti­ments to Oewis, say­ing that, ​“We should put an end to the smug­gling tak­ing place from Syria and other coun­tries in a bid to pro­tect the sec­tor.”

The lack of pro­tec­tion has been harm­ful to both the agri­cul­ture indus­try and farm­ers them­selves: in some parts of Lebanon such as Kfeir, farm­ers rely solely on the pro­duc­tion of olives and olive oil for a liv­ing, and smug­gling has caused approx­i­mately 80 per­cent of the peo­ple in such areas to immi­grate else­where.

Howayek also pro­vided star­tling sta­tis­tics: there are 59,000 hectares of land in Lebanon pro­duc­ing around 75,000 tons of olives, and ​“If we con­sider that 50,000 tons of olives go to the pro­duc­tion of oil then we should be hav­ing over 10,000 tons of yearly olive oil locally pro­duced,” he said.

However, of the nearly 10,000 tons of olive oil that were exported in 2016, many were not actu­ally Lebanese olive oil. Many mer­chants are not export­ing locally pro­duced olive oil, they are in fact buy­ing smug­gled prod­ucts from Syria and Tunisia at cheaper prices to export it to other coun­tries, and there is no sys­tem to pre­vent this or con­firm that the exports are in fact Lebanese olive oil.

Consequently, Lebanese farm­ers are stuck with a sur­plus of olive oil at the end of their har­vest, and mer­chants end up max­i­miz­ing their prof­its by sell­ing cheaper prod­ucts at higher prices.

Blominvest Bank stud­ied the chal­lenges fac­ing the Lebanese olive oil indus­try, say­ing that, ​“Lebanon’s high cost of olive pro­duc­tion has neg­a­tive con­se­quences for its com­pet­i­tive­ness in the domes­tic and inter­na­tional mar­kets. To com­pen­sate for this con­straint, Lebanon imports inex­pen­sive oil from other Mediterranean olive oil pro­duc­ing coun­tries, where the cost of pro­duc­tion is much lower. Such imports profit bot­tlers, who mix lower-priced imported oil with Lebanese oil to reduce costs and sell into both domes­tic and inter­na­tional mar­kets,” it said.

“Lebanon does not impose any trace­abil­ity or label­ing require­ments with regards to ori­gin, mak­ing it eas­ier to blend oil imported from abroad that may be lower in qual­ity,” Blominvest found, ulti­mately con­clud­ing that, ​“The gov­ern­ment should give finan­cial sup­port since turn­ing a tra­di­tional mill into an auto­mated one can con­sti­tute a hefty invest­ment depend­ing on the capac­ity and sophis­ti­ca­tion.”

• The Daily Star


• The Arab Weekly