Jordanian olive oil industry review

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High production costs, consumer behaviour and weak purchasing power combine to prevent the Jordanian olive oil industry from growing.

According to olive growers and olive oil producers, Jordanians promote the organic quality as the only export strength because they cannot count on a price advantage in international markets where the cost of Tunisian, Greek, Spanish and Italian olive oil, among others, is much lower.

In an interview conducted by The Jordan Times, the chairman and board members of the Jordan Olive Products Exporters Association indicated that farmers and owners of olive mills are at a disadvantage price-wise especially when 1 kilogramme of olive oil in Europe sells for around JD3, while the local production costs not less than JD3.75 at best.

The association members pointed out that since 1995, production costs have increased by 500 per cent, mainly due to higher electricity and water charges, as well as labour payments.

Chairman Mohammad Samih Barakat, Vice Chairman Mohammad Al Jazi and board members Fayyad Al Zyoud and Ammar Kataneh spoke about efforts to increase olive oil exports by participating in various international exhibitions and improving the quality, but conceded that the price remains a key obstacle.

They noted that the European Union gives Jordan a quota, but local farmers and mills are unable to benefit much from this incentive because of stiff competition from other countries.

Even politics and patriotism play a role, as consumers in Arab Gulf states opt for Palestinian olive oil, in an expression of solidarity and camaraderie with the people under Israeli oppression, they said.

In view of these constraints, the sector’s representatives said Jordan’s annual olive oil sales abroad are limited to between 1,000 and 1,500 tonnes, mainly sold to Japan, Arab Gulf states, and some European and Latin American countries.

According to Barakat and Al Jazi, total olive oil output averages about 20,000 tonnes per year, a quantity that places the Kingdom in ninth place worldwide.

But when it comes to local utilisation, the country trails far behind in international ranking, as Jordanians’ consumption stands at 3.5 kilogrammes per capita annually, compared to 24 kilogrammes in Mediterranean countries

Barakat attributed the very low rate to the people’s weak purchasing power and stressed that the price is a determining factor which leaves no option for consumers but to look for a cheap, low-quality product.

“Jordanians compromise quality for price,” he indicated.

“Jordanians do not realise that by buying olive oil over the course of a whole year they can avoid immediate payment and stretch their spending,” he said, also expressing doubt that the public knows about the year-round availability of olive oil, especially in light of high standards of storage facilities and handling techniques.

Al Jazi blamed consumer behaviour and the public’s lack of knowledge about the quality of olive oil for compounding the sector’s woes.

“People here limit their purchases of olive oil to two months each year, on the assumption that October and November is the season for doing so. Accordingly, with a tight wallet, they rush unaware of technical issues that determine the quality and grade of oil,” Al Jazi said.

He explained that timing at every stage is very important, whether in terms of harvesting olives, sending the crop to mills, processing the right quantity into oil, proper storing and treatment for acidity level.

According to Barakat, Jordanians like pungency in the olive oil, but the acidity level should not be more than 3.3 per cent if it is to be considered of good quality.

Al Jazi and Barakat lamented the rush that takes place towards the end of each year because the mess that occurs in October and November distorts most quality and pricing standards.

The association members stressed that unless consumer behaviour changes and prices become more affordable, the Jordanian olive oil industry will continue to lag behind despite the fact that the sector has the potential to grow with the right approach.

SourceThe Jordan Times

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