Chile’s Olive Oil Exports Jump 144 Percent in 2009
Chile’s olive oil exports so far this year are up 144 percent in volume and 117 percent in value on last year, the country’s agriculture minister, Marigen Hornkohl, said as she opened the seventh national olive oil meeting organized by the producers’ association ChileOliva. This note covers the figures, why a small producer is growing this fast in a year of global crisis, and what it means for buyers in the United States, its main market.
What happened
The meeting, the VII Encuentro Nacional del Aceite de Oliva, ran under the slogan “the challenge of going out into the world”, and the minister’s numbers fitted it. Besides the jump in exports, she said national production is expected to grow about 30 percent this year, to around 8,500 tonnes, with the United States as the main destination. She called the sector a required reference point in the government’s plan to turn Chile into a food-exporting power, and said it had moved in a short time from a small, mostly domestic activity to part of the country’s export basket, with oils already winning international prizes.
According to the ministry, olive groves now cover about 20,000 hectares, running from Arica and Parinacota in the far north down to La Araucanía, and some 50 companies are producing with modern mills. The projection presented at the meeting is for more than 33,000 hectares by 2015 and around 42,000 by 2020. Speakers from Portugal, Spain, the United States and Brazil took part.
The numbers behind the growth
ChileOliva’s own report on 2008 shows how steep the curve already was before this year’s surge.
| Chile, olive oil sector | Figure |
|---|---|
| Area planted for oil, 2007 / 2008 | About 12,000 ha / about 16,000 ha |
| Production, 2008 | About 6,500 tonnes (up 27 percent) |
| Exports, 2008 | 853 tonnes, about US$5.1 million FOB (up 62 percent) |
| Imports, 2008 | 705 tonnes (down 26 percent) |
| Production forecast, 2009 | About 8,500 tonnes (up about 30 percent) |
| Exports, 2009 so far | Up 144 percent in volume, 117 percent in value |
Put those side by side and the story is clear: in 2008 Chile still imported almost as much olive oil as it exported. This year, for the second year running according to the minister, it will be a net exporter. In world terms these are tiny volumes, a rounding error next to a single Spanish province. What makes them interesting is the direction and the kind of oil: young groves of varieties such as Arbequina, Frantoio and Picual, picked early and milled fast for the premium end of the market.
Why Chile is growing when others are struggling
The timing is odd on the face of it. Mediterranean growers are selling below cost and Brussels has had to prop up prices. But Chile is not competing in that bulk market. Its producers are building brands for supermarket and specialty shelves in the Americas, where their harvest in the southern autumn gives them fresh oil to sell at the time of year when Mediterranean oil is already months old. This site has watched the build-up for years, from Chile’s move into health markets and its early export push to a Spanish company starting Chile’s largest olive oil business.
- Chilean oil reaches northern markets in late spring and summer, when Mediterranean oil is already months old.
- Most groves are young, irrigated and planned for machines, so costs are predictable.
- The home market is small, so growth has to come from exports.
A 144 percent jump sounds dramatic until you remember how small the base is. When a country exports a few hundred tonnes, one new distributor in the United States can double the figures on its own. Watch Chile for the quality and the season, not the percentages. The genuinely useful thing for a buyer is that a well-made Chilean oil bought in early summer is often the freshest extra virgin on a North American shelf.