International Observatory for Organic Olive Oil

Brazilian olive oil

2012-01-14T10:57:00.000-08:00

Dear beloved followers and readers of the International Olive Oil Observatory,
as you know, we already talked about olive oil in Brazil, mainly in our reports about international trade.
If we where depicting Brazil as one possible emerging market, given its booming economy and its increasing imports of olive oil (see our articles back of some months ago), here we are with the first Brazilian olive oil: Olivas do Sul owned by Josè Alberto Aued.
From what we read from its rich website and blog (read the full original text), this pioneer of olive oil counts some 23 hectares of olive orchard planted with arbequina, arbosana and koroneiki, harvested to mill some thousands liters of extravirgin olive oil.
The interest of Brazil for olive oil is also testified by Expo Azeite (give a look), an international fair that celebrates this year its 6th edition, that accounts for large international sponsorships (as Pieralisi), and that seems being fairly working to disseminate the culture of olive oil consumption.
We invite every body to keep looking at this interesting evolutions, we'll do the same.

Bests!

Major organic oil producer Kailis collapses

2012-01-13T08:50:00.000-08:00

Dear all,
we report here the collapse of one of the largest organic olive oil producers in the World, Kailis olive oil, a company with a 2,000 hectares olive orchard in Australia. You can read it on ABC rural (November the 30th 2011):
http://www.abc.net.au/rural/news/content/201111/s3380140.htm

Kailis used to produce a real good quality organic olive oil as, if you do not trust our tasting abilities, you can judge by the prizes he won. The former article indicates in the European (namely Spanish and Italian) cheap olive oil Aussie imports the reason for Kailis to drop out.
May be. May be, it could be interesting to look at the cost structure of such a large orchard, for us to learn more about farm management (there's plenty of debate about efficiency). Or, may be, it could be interesting to understand how European competitors can bring cheap olive oil in Australia. In the mean while, the Italian Monini - Carapelli and other Italian brands are no longer Italian owned, as you certainly know- came out recently with its first Australian olive oil bottle, produced from some hundreds of hectares of olive trees in the "Down-under".

Interesting, isn't it?

Bests.

Olive oil in Brazil

2011-10-10T05:20:00.000-07:00

Hi all, just a few lines today to quote an interesting article about olive production in Brazil

http://revistagloborural.globo.com/Revista/Common/0,,EMI270216-18287,00-MAPA+DAS+OLIVEIRAS.html

Bests

Olive oil market review #1

2011-09-28T05:59:00.000-07:00

We would like to start today a new activity, a database of references of selected pubilcation about the olive oil market.
There are really few energies paid to shed a light on this market. As we know, the olive oil market raised to a considerable total value only in the most recent years, and this could be the main reason behind the aforementioned lack of focus. There are really few articles about international trade dynamics, consumer preferences, industrial organization. A relatively fair amount of papers contributes to uncover the policy related to the olive oil sector. Given the specific nature of both the production function and the industry, and due to the large amount of small-to-medium sized farms involved (mainly in the mediterrean area), subsidies always played a relevant role, thus leading to a need for depth analysis.
Most of the contributions, use descriptive statistics and qualitative analysis methods. Most of the attempts of inferential modelling applied to the olive oil market deserve to be refined, some presents a considerable level of analytical skills.
Finally, many articles are related to the health and cultural implication of the olive oil consumption and production.
We hope, by opening this session, to rise interest for the modelling of the olive oil sector's dynamics and to a create a virtual place where compare perspectives, ideas, and results.

Reputation: does it matter?

2011-09-23T08:18:00.000-07:00

How much could a company's reputation influence the purchasing behavior of the ultimate woman or man between the shelves of a Deli or iper-market thousands of miles far away?
Guess.
And what about if we consider a Country's reputation? Well, hundreds of pages have been written about reputation and business, but we feel the need for you to read this unpredictably detailed article about italian's ability in olive oil frauds, that the "The New Yorker", one of the most prestigious and "elite" american cultural magazines, edited three year ago (by Tom Mueller), titled:
"Letters from Italy: Slippery business - the trade in adultareted olive oil". (go to)

Now, the question is: where did Tom get to know about it?

"Fraud is so widespread that few growers can make an honest living" one expert says.

Tom Mueller - The New Yorker, 13 August 2007.

Markets "ignoring" the crisis

2011-09-16T03:48:00.000-07:00

There is a world wide crisis, and there are places were crisis means growth. We do not intend to infer about the global scenarios effects on the olive oil international trade, however, there are Countries were the consumption of olive oil is all but decreasing. China, Brazil, Poland and Australia.

These seem to be the emerging "Fantastic Four" of the olive oil market. while the World average growht rate was downsloping at a yearly pace of -1.7% (between 2007 and 2010), mainly due to the recent economic crisis claimed to be the worst since the '29, these markets - net importers, except Australia - were showing an increasing demand for olive oil. Take two minuets of your time and look at Brazil: in the last 10 years Brazil became the 5th market for the olive oil import values, growing at an average yearly pace of +21% (+24% in the last 3 years, disregarding any economic crisis). During the first semester of 2011, Brazil registered a +35.5% compared to the same time frame in 2010. Who took advanteges of such a growth? Spain and Portugal increased their sells by the 50% in the first semester of 2011. Italians, who have (or had?) the fame of being the greatest olive oil merchants, seemingly did not ride the Brazilian boom: their exports grew by the 0.5%.
On the other hand, Italy was able to attain better results in Poland and Australia, holding on its market quota - scaling up of a 5% in Australia.

The Asian market #3 - Shadows and lights on the Japanese olive oil market.

2011-08-10T12:02:00.000-07:00

Till the last year the Japanese demand for olive oil was seemingly a deepening sink. While the international trade in 2008 and 2009 was falling (with some exception), the Japanese olive oil imports were flowrishing. As showed in figure 1, the growth rate reached the roof of a +31.6% in 2010, and Japan was the 7th market in the world wall of fame of olive oil importers. The beginnig of 2011 stopped this favourable season. Comparing the first 5 months in 2011 and 2010, the Japanese olive oil imports decreased by a severe -10%.

The most likely reason could be addressed to the Tsunami disaster (see our previous post) and to the economic crisis that invested also this share of Asia. Turkey and Spain suffered the most for this debacle, leaving on the ground a -28.3% and a -17% respectively, while the Italian exports to Japan lost "only" a -6% (all variations are reffered to values of trade flows). Italy was probably helped by its higher quality product, as the average export price seems to suggest.

These figures could open interesting opportunities for the Italian exporters: beyond the shadow there could be light. Their "resistance" not only indicates a favorable consensus of the Japanese consumers' preferences, known to be picky toward quality and to prefer organic to conventional food (will this attitude increase as a consequence of the fear for the nuclear contamination?) but also the chance to regain market shares taking advantage of their direct competitors' debacle. All in all, figure 3 shows us that the Italian olive oil exports to Japan are slowly, but continuously, driving toward the 2007 level.

The Asian olive oil market: issue #2 - waiting for the Japanese post-tsunami.

2011-05-18T02:03:00.000-07:00

The Japanese virgin olive oil import fall down by the -13.6% -compared to the first trhee months in 2010- and the average price stops at 3.823 euros per kilo, -3.39% compared to the same period.

Figure 1

The March 2011 11th Tsunami's effects over the Japanese economy will wait no longer. The "disaster economics" analyists are not new to such forecasts, and they are setting the pace with the first figures. International trade exchanges, mainly for those sectors where the catastrophic event could have broken entire supply chains characterized by externalizations in foreign Countries are the most vulnerable (Escith et al., 2011). The virgin olive oil Japanese import (that includes also extravirgin with or without origin and/or organic certification) should not be affected. However, the willingness to pay for such product cold be affected by several other factors, such as emotional reactions, over-payed attention to more basic needs, reduced purchasing power, destruction of selling points or any other commercial and productive activities. Basically, it is too early to come out with a exaustive evaluation, since data actually stop at March 2011.
Nonetheless, we can say something. If since February 2011, the Japanese virgin olive oil import raised by 150 thousands euros, a deeper looks shows that import fall by the -13.6% comparing Jan-March 2011 with Jan-March 2010. But what kind of olive oil reaches the Japanese shelves? Well, it seems that the Japanese consumers and industry (especially cosmetic) are quite aware of quality issues. If we take the average unit value as an average price (that includes insurance and toll) it is still high, indicating a quite high quality product, although it fell down to 3.823 euros, -5.72% with respect the average price in 2010 (say 4.055 euros), and - 3.39% with respect Jan-March 2010. Import value and quantity fall down - following a negative trend begun almost a year ago (Figure 1) - as well as the average price, but the truth is hidden in the details. So, while we invite you to order (for free) our complete report, we signal the latest trends for the main exporters to the Japanese market: Italy, Spain and Turkey. Comparing the first three months of 2011 with the respectives in 2010, Italy is the only showing positive variation (+8.5%, see figure 2), while both Spain and Turkey lost some points (-12.2 and -2.1 respectively).

Figure 2

Figures and facts from our elaboration on ICE and ISTAT data.

This work is licensed under a Creative Commons Attribution 3.0 Unported License.

What's happening in Asia

2011-04-15T01:33:00.000-07:00

While we are here analyzing figures and data, companies, small business and Governments move their steps in the Asian olive oil market. Here some example, just to tickle your curiosity.

Portuguese olive oil and wine at the Shangai 2010 Expo: pictures showing promotional activities, tasting and chefs.

Some good impressions about olive oil consumption in Japan (from October 2009..), although not as grounded as a consumption analysis could be, can be found on Teatro Naturale, just click.

The Spanish Government went further. Spain is actually (March 2011) the larger exporters of olive oil in China - still we need to deepen the details. May be this leading position can be addressed to the Spanish Foreign Trade Institute, that created a dedicated website to promote Spanish olive oil in China (in Chinese and English). Check it out here.

India, where all still have to come, starts showing interest toward olive oil. That's what the Press Trust of India, PTI, the largest press agency in India says.

"Driven by increasing health-food awareness in India, and aggressive marketing by various firms, Olive oil consumption in the country is likely to grow by over 5-fold to 25,000 tonnes in the next five years." "Olive oil consumption in India is growing at a fast pace in India as more and more people are switching to healthier foods. It is likely to grow over five fold by 2015," Indian Olive Association President V N Dalmia said.He said various Olive oil producing countries and marketing firms are investing in creating awareness about the oil in the country. "European Union, particularly Italy, has earmarked a budget of over 1.3 million euros, which will be spent in the next three years, for spreading awareness about the Olive oil in the country," Dalmia said. According to the Association, India's Olive oil consumption was around 2,600 tonnes in 2009 and is projected to cross 5,000 tonnes this year. "By mid-2010, the consumption had already crossed 2,600 tonnes and as the maximum growth is expected during the festive season, we are hopeful that it would easily cross 5,000 tonnes mark," he added. Besides, efforts are being made to grow Olives in India".

Just a "candy" to close with Inda: here a Spanish company exporting to India: what to say about it? We could start from the packaging.

As professionals all we can say is take this facts as they come: they are not based on reliable investigations, still they are representative of the dynamics in the Asian Olive Oil Market. We will do our best to support them with proofed analysis.

More to come.

The Asian olive oil market: issue #1

2011-04-12T02:02:00.000-07:00

We start today a new focus over the Asian olive oil market, namely imports.
If the early rise in olive oil consumption in the Asian Countries made this topic interesting, the latest events in Japan call for some further investigation. Although we do not have figures about organic olive oil, we believe these information can be of a real use also for organic producers and traders. Asia is not considered a producing area - we will come across it later - thus imports are a good aproximation of this market.

Today we begin looking at the growth rates in the last two years. As you can see in the picture below, 2009 will be remembered as a "not-so-good" year among olive oil marketers, while 2010 shows interesting perspectives. Compared to the World market the Asian imports turn out to contain losses in 2009 (-3.9% growth rate vs -14.6%) and show an incredible reaction in 2010 (+42.7% vs +13.9).
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source: our calculation on Istat and ICE data.

Condolences - Marcinase organic EVOO

2010-12-02T06:48:00.000-08:00

The staff of the Observatory whishes to express its sadness for the loss of Maria Massari, smart and sweet woman who worked so remarkably hard giving so much to the world of high quality organic olive in Puglia.

+20% for the Italian organic olive oil market

2010-11-26T03:59:00.000-08:00

According to ISMEA - the Italian Institute for the Agro-food Market - the expanditure for organic olive oil in Italy rised by a +20% in the firs 9 months of 2010.

Generally speaking, the domestic purchases of organic food generally rised o+11% in the same period, mainly in the hypermarkets (+21,7%) while supermarkets decreased by a-1% compared to the same time frame in 2009.
Sells rised mainly in Southern Italy, the largest producer but the smaller retail market (Sicily +25,3%), folowed by the North-Eastern area (+15,4%), North-Western area (+9,7%) and the Central Italy (+3,3%).

Organic food consumption is still concentrated in Northern Italy (70%).

http://www.ismea.it/flex/cm/pages/ServeBLOB.php/L/IT/IDPagina/5622

Organic Olive Oil Price Monitor

2010-11-23T02:59:00.001-08:00

Dear all, we are collecting data about organic olive oil prices worldwide.
Data are collected monthly using a short survey, starting from November 19th 2010.
We are asking to all our contacts to participate: producers, technicians, agronomists, olive oil tasters, traders, buyers, journalists, etc.

Please, help us and take the survey right now!
It takes just 2 mins.

ENGLISH:
Click here to take survey

SPANISH:
Click here to take survey

ITALIAN:
Click here to take survey

Data will be published monthly - you can ask to receive a report.

Organic Olive Oil Production Worldwide - Trends

2010-11-23T02:08:00.000-08:00

Dear all, here you can find our estimantions for the organic olive oil production internationally in the latest years. Estimations are based upon data provided by several institutes, mainly Ifoam and Eurostat.

How is the international trade network of olive oil changing?

2010-08-12T09:43:00.001-07:00

The recent growth of olive oil consumption rose interest for its international trade exchanges. The intensified exchanged volumes and values also increased the complexity of the market. Even the role of the main producing and exporting Countries slightly changed. Complexity also depends by product specificities that offer the chance to mix different olive oils to get a marketable end product at lower prices. The perspective of profit attracted multinational industries and corporations, whose interests are transversal the National borders influencing the trade relationships. At the same time, international trade treaties resettled the map of exchanges, mainly under the influence of globalization and liberalization of markets. Several approaches have been used and tested to provide the scientific community with tools able to condense an easy-to-read and clear information, and to unpack the dynamics of the olive oil international trade. What's the position of the main exporting and importing (or both) Countries? Are there new players? What's their position? Are they emerging or not? Who are the best brokers? We use network analysis trying to answer questions like these.

Write us if you have inquiries or need further details.

umberto77@email.it

Corporate Social Responsability among organic olive oil producers - an explorative research

2010-07-14T07:17:00.000-07:00

The Observatory, in collaboration with the International Biol Prize, is leading an explorative research about Corporate Social Responsability among organic olive oil farmers and producers in Italy.

The research is based upon an on-line questionnaire and we actually collected 54 (full) respondents.
Preliminary results were presented at the 10th International Forum about Olive Oil in Bari, April 28th 2010.

Today we sent the last call for filling out the questionnaire.

Soon final results will be available.

Preliminary explorative research about ethical values and organic food consumption in Apulia region

2010-07-06T07:38:00.000-07:00

Published the results of the "Preliminary explorative research about ethical values and organic food consumption in Apulia region, South of Italy", by Noureddin Driouech (Mediterranean Agronomic Institute of Bari, Italy), Umberto Medicamento and Bernardo De Gennaro (University of Bari - Aldo Moro).
free download at: http://orgprints.org/17155/

Ethical Marketing

2010-02-10T07:12:00.000-08:00

One example of marketing for ethical purposes is the Cause Related Marketing: is it enough to give firms an ethical profile?

http://causerelatedmarketing.blogspot.com/

What kind of certification for ethical agriculture

2010-02-09T14:26:00.000-08:00

Today I was reading and thinking about CSR and certification schemes. Suddenly, one question came to my mind: what kind of certification mechanism is closer to the idea I have of ethics in agricultural productive contexts?
The ideas of ethic I was actually thinking are two: 1) no workers (or worst, immigrant workers) exploitation along the supply chain and 2) a fair remuneration of the "weakest" rings of the supply chain (generally the producers, but not just them).
About the 2nd it could be discussed who are the weakest and what makes them weak. About the first, I imagine it is easy to find objective indicators.
In extreme summary, a farm or a company going ethically should have an ethical manifesto and join certification and initiatives, generally voluntary, that could witness for its ethical profile, better if networking with oher stakeholders playing ethical according to their objectives. Compliance with existing certification protocols or with new ones could work as proof of a fair play.
But, would'nt be more effective , for the previously showed ideas of ethics, a self-certification mechanism by the whole networking supply chain?
I am referring to a system of supervisors where everybody has an incentive to not disobey a set of few and shared ethical rules.
Is to say a system were the auditors are (elected) part of the supply chain being so both auditors and controlled. Everyone controls everyone, and everybody find an incentive in applying this mechanism so that it is not oppressive. The incentive should be higher revenues, fairly distributed.
I think that this kind of mechanism 1) is more difficult to cheat, especially by the strongest part of the supply chain that could be interested in having an "ethical label" just to market more 2) since it is implemented by the same supply chain actors (and not by an external auditor) it implies a concrete "ethical growth" of the firms participating.

Ethics and CSR (in agriculture)

2010-02-06T13:21:00.000-08:00

Hi!
In these days, looking for insights about agriculture and ethics, I am deepeneing the role of certification protocols. The Corporate Social Responsability (CSR) is one of those. So, I'm actually reading a book by Lucia Briamonte and Luciano Hinna ("La responsabilità sociale per le imprese del settore agricolo e agroalimentare" - Corporate Social Responsability for agriculture and the Food industry; INEA, 2008).
I would like to post here something about this task and I will refer here several times about this book.
First, it seems there is difference in the application and meaning of CSR for big companies and small and medium farms and enterprises (SMEs). Leaving this apart for a while, I'll focus here on this sentence from Briamonte and Hinna's, that I freely translate from Italian: "In the case of the SMEs, as opposed to a financial and human capital constraints, there is a stricter need for direct relatioships with the stakeholders. It follows that for the SMEs the implementation of the CSR requires 1) an integrated path with the other farms and with those segments up and down along the value chain, 2) a linkage with the promotional actions by the institutions and 3) the support of the local community."
The authors then refer to the SOCIAL CAPITAL which stems from these relationships as a strenght for the SMEs that, being more integrated on the territory, would cover the organizational gap with the big enterprise in implementing the CSR, thus eliminating the firm dimension from the set of constraints.
First, the debate about SOCIAL CAPITAL (SC) is still struggling about its "endogeneity" is to say that there is still no agreement about the dilemma if SC originates from relationships, or relationships occur if there is a "something" asset (eg. cultural background) supporting them. So, translating to our case, it's easier for firms to apply the CSR protocol when they already follow its principles, but there is no reason to think that implementing the CSR means to improve SC, which would lead to enhance future CSR adoptions.
Second, there is no proof that the SMEs belongs to a context rich in (relationships and then) SC by its nature.
Still, it (may be) is true that working on relationships development and management, inside and moreover outside the firm SC develps, and this can help CSR application.

So, CSR, in principle, seems to be something that needs a local ground, at least for SMEs.

Why it should not be true for big companies? Why CSR for big companies should be a "label for a protocol" and not a "label for SC" or whatever other form of locally involved action?
More, can we some how come out with testing whether the proposition "investing in relationships (or in SC) helps CSR accountability and then ethics embedment in production" is true or not?

Ethical goods consumption

2010-02-05T01:52:00.000-08:00

The UK market for ethical goods was worth 36 billion pounds in 2008 compared to 13.4 billion of 1999. (source: "Ten Years of Ethical Consumerism: 1999-2008"; Co-operative Bank)

Ethics and Agriculture

2010-02-04T07:56:00.000-08:00

The International Forum for Organic Olive Oil is approaching a new topic for its 10th edition: agriculture and ethics. It would be more appropriate to talk about olive growing and ethics since this is our main focus. However, we think that our particular perspective could work as concrete proposal to shift from the detail to the general picture.
Ethics within productive systems has been recently debated. The main tasks seem to be: ethics as a new syntax for future development and ethics as a need of society.

The first theme passes through all the places of the civil activity, both social and economical (if there is still a need to keep them separately). The debate is mostly philosophical even if it tries to trace a road map for the human activities. On this path the Catholic Church offered recently an example, as well as a part of the political and cultural world.

The second task is a river fed by several springs. The personal uneasiness, for those who feel it, that find a natural way out in the “consumeristic” sphere of the daily life by stop purchasing brands with a low ethical profile. The origin of these feelings may be found in the brand policies that pushes individual within their personal sphere, or in the astonishing discoveries about criminal activities by well known brands and companies against workers, weak populations, and the environment.
Some other times, the discomfort origins from a disproportion between the value and the prize paid, and by the awareness of the large companies’ share of profit: value and price are too far, and the same meaning of value is questioned. Other than the negative reaction toward consumption, the reaction to the finds positive guises: people often look for those who can guarantee an ethical profile.

Another spring feeding the river of the need for ethics comes from the productive world. The cases of inhuman work conditions and of overwhelming contractual power are over and over unsustainable and not tolerable. Unsustainable not just ethically but also economically. The economic and credit crisis is probably dismantling a system of connivances that made it possible to sustain this situation. We find here again the disproportion between price and value that often hides unbearable work conditions and environmental disasters, this time not in Countries far from our home place but within the national boundaries. Poverty is coming back not just because of the economic crisis, but on the shoulders of off-limits work and social condition. The exploitation of immigrants during the harvesting season, the recent events in Rosarno (Southern Italy) and other episodes in the rest of Europe are just some examples. Still, another uneasiness comes from the associative and volunteers’ world whose awareness is more often organized and that uses its own grammar, communicating with precise rules and more efficiently. The associationism is more experienced, it is able to lobby and interact in different ways, it has its own bureaucracy, assuming almost the shape of a second political playground.

Everything seem to point to a shift in the collective sensibility and in both the collective and individual knowledge (cognition) of reality.

We can add a third plane of discussion: comsumption. A specification is required at this point: we hardly like to use the terms “consumption” and “consumer” persuased that the there is another vocabulary to descrive the and discuss of economics or of just the purchasing behavior, but we do not want to load this discussion. Comsumption and the use of ethics for marketing purposes, then.

(Before and) During the Forum we would like to pose sevral questions, both generic and specific.

Some of the generic questions that we address you from now to the 28th of April 2010 (day of the Forum) are: how to use ethical contents to enhance local (rural) productive systems? How to guarantee a “fair” value, specifically, for the food products? Is it necessary to guarantee farmers a “fair” income? And how? Could certification labels and protocols be a appropriate answer? Could it be ethic the answer? Could ethic be used as a marketing tool? If so, is it ethical itself? How to do it?

Among the specific questions we would like to work on there is the emblematic case of olive oil market. Revenues’ guaratee for the olive producers has been largely debated and know it seems to be more uncertain than ever. The organic alternative guaranteed for a while, or it could have guarateed, the chance for product differentiation and a more fair supply chain in terms of value distribution.

This is just one of the tasks for the 10th International Forum on Organic Olive Growing. What kind of example does organic olive growing offer to the rest of agriculture? How to improve the chaces it offers? On which line to work for innovation?
We aim to animate a debate that could lead to useful results, possibly stimulating concrete actions and projects, hoping to gain.