Brazil Olive Oil Imports Hit a Record as Prices Sag
Brazil olive oil imports reached an all-time high of about 65,000 tons last season, up 21 percent, according to the International Olive Council’s March market newsletter, and Portugal, not Spain or Italy, supplies more than half of it. The same report shows producer prices in Europe still sliding. Here are the numbers, why the Council is turning its promotion budget toward Brazil, and what it tells you about where the olive oil trade is heading.
What the Council reported
In the crop year that ran from October 2010 to September 2011, Brazil imported 65,038.7 tons of olive oil and olive pomace oil, its highest figure ever and 21 percent more than the season before. Over five seasons the growth is 78 percent, from about 36,573 tons in 2006/07. Most of it is the better grade: 72 percent was virgin olive oil, 23 percent was the blended grade sold simply as olive oil, and 5 percent was pomace oil.
The suppliers are the surprise for anyone used to the American market. The European Union provided 88 percent of Brazil’s olive oil, but within that, Portugal alone had 55 percent, Spain 26 percent, Italy 6 percent and Greece 1 percent. Argentina, the neighbor, supplied 11 percent. For table olives the picture flips: Argentina shipped 75 percent of Brazil’s 86,993 tons, Peru 16 percent and the EU just 9 percent.
| Brazil, 2010/11 season | Figure |
|---|---|
| Olive oil and pomace oil imports | 65,038.7 tons, up 21 percent |
| Growth over five seasons | 78 percent |
| Share that was virgin grade | 72 percent |
| Top olive oil suppliers | Portugal 55%, Spain 26%, Argentina 11%, Italy 6% |
| Table olive imports | 86,992.8 tons, up 10 percent |
| Top table olive suppliers | Argentina 75%, Peru 16%, EU 9% |
The growth has carried into the current season. In October to January, Brazil’s olive oil imports were up 8 percent on a year earlier, China’s up 20 percent and those of the United States up 10 percent, while Australia fell 10 percent and Canada 18 percent.
Why Portugal wins in Brazil
My read is that language, family ties and a long habit of Portuguese cooking in Brazilian kitchens give Portuguese brands a head start, and the numbers bear that out. Spain produces more olive oil than anyone, yet in Brazil it comes a distant second. The Council says it will shortly launch a campaign to promote olives and olive oil in Brazil with the backing of its member countries, which is a clear sign of where the trade sees its next big buyer.
Prices at the other end of the chain
The same newsletter is less cheerful for growers. Spain’s Olive Oil Agency counts 1,560,500 tons produced by the end of February, well past the old record of 1,416,000 tons set in 2003/04. With that much oil around, producer prices for extra virgin were down 13 percent on a year earlier in Spain, at €1.75 a kilo, down 28 percent in Italy at €2.35 and down 3 percent in Greece at €1.84. In Spain, extra virgin was fetching only about 8 euro cents a kilo more than refined oil.
That gap is the figure to remember. When the best grade earns almost nothing over refined oil at origin, the incentive to make true extra virgin, which means picking early and milling fast, gets very thin.
A fast-growing market is where exporters send the oil they cannot sell at home for a good price. Brazil’s buyers are new to the product and mostly judge it by the brand and the price. If you are shopping there, or anywhere olive oil is still new, look for a harvest date and a named origin on the label, and be wary of extra virgin that costs the same as the plain grade.
We noted Brazil’s first steps as a buyer in Brazil Discovers Olive Oil. Argentina’s push into table olives goes back to Argentina’s olive exports set new record, and the problem of Spanish prices below cost is covered in Spain Sells a Record, Yet Olive Oil Prices Stay Below Cost.