Portugal's Rising Exports Fuel Demand for Imports

Market research from the Office of Economic and Commercial Affairs of the Greek Embassy in Lisbon assessed the poten­tial of Portugal’s olive oil sec­tor and iden­ti­fied its tra­di­tional stake­hold­ers. It was found that ris­ing demand for exports fuels demands for imports, but the coun­try is still uncharted ter­ri­tory for many for­eign pro­duc­ers.

The researchers noted that Portugal is self-suf­fi­cient in olive oil and ranks fourth in annual con­sump­tion with 7.8 liters per per­son, fol­low­ing Greece, Spain, and Italy.
See Also:The best olive oils from Portugal
The annual pro­duc­tion amounts to around 70,000 tons, tak­ing into con­sid­er­a­tion the data of the last decade. The har­vest of 2017 was expected to top at 100,000 tons, com­pared to 69,000 tons in 2016.

For the 2017 – 18 sea­son, a decline is pro­jected with the har­vest pos­si­bly reach­ing a total of 78,000 tons of olive oil. The regions of Baixo and Alentejo in the south account for 70 to 80 per­cent of the total pro­duc­tion of the country’s olive oil, where the mild cli­mate and high pre­cip­i­ta­tion lev­els allow for olive tree cul­ti­va­tion on 350,000 hectares of land.

Selling prices of extra vir­gin and vir­gin olive oil in Portugal went up in 2017 by 18 per­cent and 15.6 per­cent respec­tively, com­pared to 2016; extra vir­gin was sell­ing for €3.84 ($4.76) per kilo and vir­gin olive oil for €3.60 ($4.46) per kilo, accord­ing to the National Olive Oil Association ​‘Casa do Azeite’.

Despite that Portugal cov­ers its inter­nal con­sump­tion, the demand for exports stip­u­lates that some olive oil needs to be imported and then exported as domes­tic oil. A ​‘buy low – sell high’ approach is used in this case, mean­ing that olive oil is bought from lower-cost coun­tries like Tunisia and Morocco to be then exported to other coun­tries for a higher value. In 2015 for exam­ple, exports decreased by 6 per­cent com­pared to 2014, but their total worth went up by 17 per­cent due to the 25 per­cent rise in prices.

For the 2016 – 17 sea­son, domes­tic con­sump­tion was expected to absorb 70,000 tons of the total yield of 100,000 tons, while exports were cal­cu­lated at around 130,000 tons. Therefore, a quan­tity of 100,000 tons of olive oil should be imported to cover the demand for exports.

Spain is by far Portugal’s biggest sup­plier, pro­vid­ing more than 98 per­cent of the imported olive oil. The value of the imports from Spain in 2016 came to €275.6 mil­lion ($343.47 mil­lion), with other coun­tries like Brazil, Morocco, and Chile, con­tribut­ing to the €279.6 mil­lion ($348.45 mil­lion) of imports alto­gether.

As far as exports are con­cerned, they added up to approx­i­mately €411 mil­lion ($512 mil­lion) in 2016. Spain and Brazil were the main receivers of Portuguese olive oil, each account­ing for about 34 per­cent of the value of exports. Other importers were Italy with 15.3 per­cent, Angola with 3.9 per­cent, and France with 3 per­cent of the value of exported Portuguese olive oil.

According to the research, Greek olive oil is not widely known in Portugal, where con­sumers con­sider locally made oil to be of exquis­ite qual­ity. However, a small quan­tity of 1.6 tons was sent from Greece to Portugal back in 2015, with an aver­age price of €7.17 ($8.94) per kilo.

During the same time period, Greece imported 24 tons from Portugal with an aver­age price of €3.48 ($4.34) per kilo. The research sug­gested that Greece sells expen­sive olive oil to Portugal and buys cheaper olive oil, keep­ing in mind that this is not a safe con­clu­sion due to the lim­ited quan­ti­ties that were traded.

Finally, the Office of Economic and Commercial Affairs iden­ti­fied oppor­tu­ni­ties for Greek pro­duc­ers in the area of gourmet and organic olive oil, or pri­vate label olive oil. It also urged Greek pro­duc­ers and exporters to par­tic­i­pate in the con­test orga­nized dur­ing the OVIBEJA expo held in the city of Beja in April each year, to make their olive oil known to the Portuguese mar­ket.

• Greek Embassy in Lisbon, mar­ket research of Portuguese olive oil sec­tor