Experts say olive oil production drops in Greece won't raise prices

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Already facing a recession and gripped by austerity, Greece’s iconic olive oil industry faces challenges, but experts say this year’s decrease in production won’t raise prices.

For thousands of families around Greece, olive oil production is a family tradition and despite an economic crisis many try to keep the time-honoured rural practice alive by retaining a nutritionally superior ingredient on their dinner table rather than any commercial venture.

For Christos Mourdoukoutas, a sports writer in Athens, the annual autumn journey to his native village in extreme southwest Greece for the olive harvest and subsequent extraction of the precious fruit is a bitter-sweet experience.

With olive groves located on roughly one hectare of prime agricultural land his family has owned for generations he expects to produce about one metric tonne of the extra virgin olive oil variety known as koroneiki this season.

“When I deduct all the expenses involved, such as labour costs, the trees’ upkeep and the customary 10 percent of the product kept by the owner of the oil press, then I’m left with a small three-figure profit,” Mourdoukoutas told SETimes. “There is a lot of work involved in maintaining and producing prime olive oil, it’s not an easy task, especially for someone like me, who is an absentee producer.”

Statistics from 2010 show Greece was the world’s third-biggest producer of olive oil, trailing Spain and Italy, although its per-capita consumption of olive oil was the world’s greatest.

Costas Chartzoulakis, the director and senior researcher at the state-affiliated Institute for Olive Tree and Subtropical Plants, said olive oil production in Greece will drop by 30 to 40 percent this season. He said production on the large island of Crete, a major olive oil producer and the headquarters of the institute, could drop by as much as 70 percent.

Chartzoulakis said there is a combination of reasons for the decline, including the fact that last season witnessed a record-breaking harvest in Greece, estimated by the International Council of Olive Oil at 350,000 metric tonnes.

Other factors he cited for the lower production figure include the fact that Greek producers “invested” less money and time in their olive groves, cutting back on irrigation, fertilisers and farm hands. Continued sluggish prices for olive oil, the overall economic crisis and less rainfall influenced producers’ concerns, Chartzoulakis told SETimes.

Nevertheless, flat prices for olive oil in the region — the harvest usually commences with the first prolonged period of cooler weather — apparently won’t be raised by this year’s decrease in production, experts said.

“There is no minimum price for [bulk] purchasers … the price is totally determined by the market forces,” Mustafa Tan, chairman of Turkey’s National Olive and Olive Oil Council told SETimes. “However, last year Turkey exported olive oil at 5.5 Turkish liras [2 euros] per litre, which was a very low price.”

Tan predicted an olive oil harvest of 130,000 tonnes this season compare to last year’s 195,000 tonnes of oil production showed by the International Council of Olive Oil (ICOO).

Despite the possibility of a decrease in overall production, Turkey continues to dramatically increase its exports of olive oil, with figures this month showing that exports surpassed 88,000 tonnes, or 207.3 million euros, for the year.

Beyond traditional producers, however, one regional upstart on the olive oil scene is new EU member-state Croatia, whose average yearly harvest of around 4,000 tonnes is mostly funnelled toward high-end boutique packaging and olive-based delicacies.

The owner of what is billed as Croatia’s first Oleoteca, a commercial platform for promoting domestic olive oil varieties and specialty products, said Croatia’s olive oil “distinctness” comes from the fact that 99 percent of production is handpicked from small farms, with almost no industrial production.

Low production intensity and high consumption by the producers themselves, according to Zagreb-based entrepreneur Leopold Botteri, is the reason why Croatian olive oil costs much more than its southern competitors — beginning at an eyebrow-raising 5,500 euros per tonne, “much higher than in Greece or Spain.”

The harvest in Croatia this season will also drop, by roughly 20 percent from 2012, with one cause for the slide attributed to an infestation of the Svrdlaš insect, or olive mite, Botteri told SETimes.

What do you think are the main reasons of reduced olive oil production this year? Share your thoughts in comments.

source setimes

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