After a Recession in Portugal, the Tiny Green Fruits of Success

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Portugal is finding that increasing exports is the way to pull its economy out of a recession.

For 127 years, Herdade de Manantiz has been producing olive oil, mostly for the domestic market. But having suffered through recession like thousands of other traditional businesses, it has started overhauling its operations and searching for customers outside Portugal.

Previously, Manantiz had relied on rare rainfall to water its 30,000 olive trees, planted across 529 acres of parched land in one of southern Europe’s driest regions.

In February, Manantiz installed its first irrigation system, an investment of 197,000 euros, or $263,000, that is meant to help quadruple production. In May, the company completed its first overseas sale — to a Brazilian retailer that bought 504 bottles of oil. It is pursuing buyers in Sweden and Japan for its oil made from galega olives, which are unique to Portugal.

Over all, after falling about 9 percent in 2008 at the onset of the financial crisis, Portugal’s olive oil exports have more than doubled since, according to data from Casa do Azeite, an industry body. Last year alone, olive oil exports rose 20 percent.

Mariana Matos, secretary general of Casa do Azeite, estimated that Portugal had added about 20,000 hectares of olive trees over the past five years, in part because of investors from countries like Spain, Italy and Switzerland.

Manuel Costa Reis, an economist at Present Value Consulting in Lisbon, which advises Portuguese banks and other corporations on asset valuations, said that Portugal’s export competitiveness was “without a doubt a very surprising and positive outcome of this crisis.”
“Portugal had been one of the losers in the globalization process because most of our industries were competing directly with the emerging markets,” he said.

He said that the economic crisis had forced companies to start producing higher-quality products that can be marketed at a higher price. Manantiz is a good example of that. Its initial shipment of olive oil to Brazil sold at 60 reais, or nearly $26, a bottle, four times what is sells for in Portugal.

Portuguese exports rose 6.2 percent in the second quarter from the comparable period in 2012, according to data this month from Portugal’s national statistics institute.

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