Coronavirus Crisis Hits Small Producers Hardest in Portugal

“We are feel­ing the cri­sis’ impact and we are going to feel it more,” Mariana Teles Branco, mar­ket­ing and qual­ity tech­ni­cian of the Center for the Study and Promotion of Alentejo Olive Oils (CEPAAL), told Olive Oil Times.

Like nearly every other coun­try in the world, Portugal is being struck by the coro­n­avirus pan­demic and the country’s vibrant olive oil sec­tor has not been spared from its neg­a­tive con­se­quences.

The effect of the dis­ease in the Iberian coun­try, how­ever, has so far been lower than in most of its European neigh­bors.

As to April 22, there were 21,379 Covid-19 cases and 762 deaths in Portugal, a rate of around seven deaths for every 100,000 peo­ple in a coun­try with a pop­u­la­tion of lit­tle more than 10 mil­lion.

These data show a stark con­trast with those of Spain, which has a rate of about 45 deaths for every 100,000; Italy, with a rate of roughly 40 fatal­i­ties per 100,000; and France, with a rate of 30 deaths for every 100,000.

According to experts, the rel­a­tively early reac­tion of the Portuguese gov­ern­ment has been cru­cial in order to slow down the spread of the dis­ease.

Portugal was placed under a state of alert on March 13^th and then under an even stricter state of emer­gency just five days later. At that moment, there were just three deaths due to the new coro­n­avirus and 785 reported cases in the coun­try. When Spain took sim­i­lar mea­sures, they already had 84 deaths.

For more than a month, Portugal has been liv­ing under a gen­eral lock­down, which, in prac­ti­cal terms, means that only strictly essen­tial move­ments – such as buy­ing food or med­i­cines and prac­tic­ing sports for short peri­ods of time – are allowed.

The country’s only land bor­der with Spain is closed, all classes are sus­pended, bars, clubs and restau­rants are shut­tered, and mas­sive events are can­celed.

This abnor­mal sit­u­a­tion is hav­ing an impact on the country’s econ­omy.

According to the lat­est IMF fore­cast, the Portuguese GDP may decrease by eight per­cent, the high­est rate on record, as unem­ploy­ment is expected to grow from 6.5 per­cent in 2019 to over 13.9 per­cent in 2020.

While the coun­try’s upcom­ing har­vest is unlikely to be greatly impacted, the cri­sis is tak­ing its toll on olive oil pro­duc­ers across the coun­try.

“In terms of pro­duc­tion, it won’t have such a big effect as all this started when the cam­paign was fin­ished,” Teles Branco said. ​“In that regard, the most impor­tant thing now is to make sure that, ahead of the 2020/21 cam­paign, olive oil pro­duc­ers have all they need to take care of their trees and that, when the moment comes, the har­vest is done in the best pos­si­ble way.”

Portugal is cur­rently the world’s ninth-largest pro­ducer of olive oil. This year, pro­duc­ers recorded a har­vest of 125,400 tons, the sec­ond-high­est total in the coun­try’s his­tory, and a recent study sug­gests that Portugal has the poten­tial to become the third-largest pro­ducer in the world by 2030.

Around 71 per­cent of the country’s pro­duc­tion comes from the Alentejo region.

Internal con­sump­tion is one of the key pil­lars of the coun­try’s olive oil sec­tor. The Iberian coun­try ranks fourth in annual olive oil con­sump­tion, after Greece, Spain and Italy with 7.8 liters per capita, up from 2.6 at the begin­ning of the 1990s, accord­ing to data pro­vided by Casa do Azeite, Portugal’s Olive Oil Association.

“At the begin­ning of the cri­sis olive oil con­sump­tion grew as it was seen as an essen­tial and durable prod­uct, but I believe that trend is revers­ing,” Teles Branco said.

“The clo­sure of restau­rants, hotels and small shops is hav­ing an impact,” she explained. ​“Those are impor­tant buy­ers at a national level and much of the olive oil won’t be sold because that chan­nel has been inter­rupted. Small pro­duc­ers are expe­ri­enc­ing a very neg­a­tive effect. Big pro­duc­ers, who are able to sell in super­mar­kets, may cope bet­ter with the sit­u­a­tion.”

Francisco Pavão, the pres­i­dent of the Association of Protected Designation of Origin Producers of Trás-os-Montes and Alto Douro (APPITAD), described a pic­ture in that north­east­ern region.

“Small pro­duc­ers in Trás-os-Montes are vir­tu­ally not sell­ing any­thing,” he told Olive Oil Times. ​“They depend on restau­rants and shops retail­ing qual­ity local prod­ucts in tourist cities, such as Porto and Lisbon. The sit­u­a­tion for them is dra­matic. Cooperatives work­ing with large super­mar­kets increased their sales dur­ing the first weeks of the lock­down, but they also suf­fer the slow­down of the inter­na­tional mar­kets, espe­cially the Brazilian one.”

Magna Olea is a small pro­ducer near Mirandela, in Trás-os-Montes, the sec­ond-largest olive oil-pro­duc­ing region in the coun­try, where the share of tra­di­tional pro­duc­ers is larger than in Alentejo.

Maria do Pilar de Abreu e Lima, one of its own­ers, told Olive Oil Times how they are deal­ing with the cur­rent sit­u­a­tion.

“Our busi­ness has prac­ti­cally stopped,” she said. ​“We are not hav­ing many orders at this moment, but I think those who are hav­ing more prob­lems are the ones who have work­ers and salaries to pay. We are a small, qual­ity pro­ducer and we don’t have any employ­ees.”

“We are tak­ing this oppor­tu­nity to try to start new busi­ness lines in the United Kingdom and Germany,” she added. ​“Also, we are sup­port­ing the chefs we work with as restau­rants are also fac­ing tough times. We try to use dig­i­tal chan­nels to share recipes and to pro­mote the use of olive oil.”

Portuguese olive oil exports are also suf­fer­ing the mobil­ity restric­tions at an inter­na­tional level. The country’s vol­ume of olive oil exports more than tripled in the last 10 years, grow­ing from 51,774 tons in 2010 to 158,688 in 2019, accord­ing to Casa do Azeite. Brazil makes up around 38 per­cent of that trade.

“Exports have also received a bru­tal impact,” Teles Branco said. ​“Unlike the pro­duc­ing coun­tries, many import­ing ones don’t regard olive oil as a basic prod­uct but as a lux­ury one. Many inter­na­tional orders have been can­celed.”

“We have to change that men­tal­ity and pro­mote olive oil so it is seen as an essen­tial prod­uct in non-pro­duc­ing coun­tries. We have an oppor­tu­nity to pro­mote the health ben­e­fits of olive oil and to teach new uses of this prod­uct at home,” she added.

Pavão shares the con­clu­sion that a com­mu­ni­ca­tion effort, both at an inter­na­tional and national level, will be key for the future of the olive oil sec­tor in Portugal.

“Now we need to reach to our cus­tomers’ homes,” he said. ​“Internationally, we need to invest in the pro­mo­tion of olive oil as the basis of the Mediterranean diet. We have to talk about its ben­e­fits for health and also about how impor­tant olive oil pro­duc­tion is for our ter­ri­to­ries and our cul­ture.”

• Casa do Azeite


• Público


• International Monetary Fund