The Need to Increase Olive Oil Production Can Lead to Offshore Investment Profits

Olive oil is turning up in more and more kitchens and on progressively more dinner tables across the world. The oil is cherished by cooks, enjoyed on salads, and healthy for the center. Over the last two decades this mix of factors has resulted in increased consumption far beyond the Mediterranean Basin, the traditional home of the olive and its own oil. It was previously that virtually all olive oil was produced along with consumed around the Mediterranean and in the centre East. Production has been sufficient for local (Mediterranean Basin) demand. As worldwide demand increases olive trees will undoubtedly be planted and olive oil produced outside of the countries which have historically been the leading producers. This is the big trend which will need capital and those who’ve the foresight may well profit from investment in growing, refining, exporting, distributing, or selling olive oil in regions as diverse as the UK, India, Japan, China, or the USA.

Olives and Who Makes the Oil

Folks have been making oil from olives for as long as 5,000 years according to archeological evidence in Greece. Today olives are grown and processed into to oil in Spain, Italy, and Greece that are the major producers at 36%, 25%, and 18% of worldwide production in accordance with recent figures. As demand for more olives and more oil goes up these countries will most likely not have the ability to answer the call. Greece, for example, devotes 60% of its cultivatable land to olive orchards already.

After the big three essential olive oil producers, come Tunisia (8%), Turkey (5%), Syria (4%), Morocco (3%), and Portugal (1%) in the same recent set of figures from 2005. These countries, from Spain at the very top down to Portugal, produced 90% of the planet supply in 2005. Every other nation produced less than 1% of world production. A large part of that is that olives are native to the Mediterranean Basin and grow best there. It is not just a matter of the plant surviving but that it produces high quality olives for refining into exportable oil.

As the figures show a small number of producers currently make the oil from olives. Now the question is who will step in to make more as worldwide demand multiplies? What kind of olives will work the very best in what locations and who is going to invest the capital to make all this work?

Where Are Folks Going to Plant Olive Trees?

Olives are grown throughout the world however they work best in the Mediterranean Basin. The area, climate, and soil conducive to growing exportable quality olive oils are on the contrary side of the Mediterranean Sea for the existing major producers, Spain, Italy, and Greece. Tunisia (8%) and Morocco (3%) already are in the top seven producers. Now Algeria, the next largest nation in Africa is planning a million hectare planting of olive trees. Algeria lies to the immediate East of Morocco and on the MEDITERRANEAN AND BEYOND. Its climate is Mediterranean. Olives are grown for food and oil already in Algeria however the infrastructure has not been present on a sufficiently large scale to refine enough oil promptly enough to create export quality oil. A major factor here is having enough processing plants dedicated to a couple of orchards and the infrastructure needed to pick and process regularly. Another factor has been that of foreign connections for export, marketing, and sales.

It turns out that men and women are going plant a million hectares of olive trees in Algeria. That’s, for those from the USA, 2.5 million acres. If planted in one block it might be 100 kilometers or 62.5 miles on a side. Foreign investors are bringing their expertise and capital to the project. Furthermore foreign companies are setting up projects so concerning attract the foreign capital necessary to plant orchards, tend orchards, pick olives, process olives to oil, and send processed oil by way of a supply chain to the supermarkets of places as far afield as THE UNITED STATES, India, and Japan.

The supply chain for olive oil looks like this:

Producer-Farmer
Oil Mill or Cooperative
Refining into oil
Export
Wholesaler
Distributor
Consumer

What foreign expertise provides to the mix will be expertise in choosing olive varieties, the building of a sufficient amount of modern oil mills and the connections for export and distribution.

A good example of a promising project in Algeria is one by a Spanish firm. This company includes a subsidiary in Algeria. Through the subsidiary the company will plant 1, 500 hectares of the Arbequinia olive. This can be a variety suitable for intensive culture. It really is drought resistant and cold resistant. The small tree yields 20% weight per volume of oil from its small brown olives and is well known for the wonderful taste of its oil.

The company will build a modern processing plant to make sure prompt refining into top quality oil for international markets. It will develop the supply chain to go olives to processing, oil to export, and exports to wholesales in markets around the globe.

As projects such as this take hold the globally demand for high quality oil will be satisfied. As private companies attract investors to the sort of profitable undertaking they’ll attract the necessary capital which has often been missing to be able to develop a complete supply chain and enhance profits.

To continue the example above the Spanish company is allotting 500 of its 1,500 hectares for private investors. Investors will receive interest on investment as well as a “piece of the action.” After three years when the Arbequinia olive starts to produce investors will receive $2 US per liter of oil produced on “their’ hectare of land. The Arbequinia variety typically produces 11,000 kilograms of olives per hectare. The olives typically yield 19% oil. Thus a hectare of arbequinia olive trees will produce 11,000 times 0.19 equals 2,090 liters of olive oil. At $2 a liter this is a lot more than $4,000 to the investor along with yearly interest. scholarly articles This arrangement will last for ten years at which time the investor will receive his initial investment back, having doubled his money. Ultimately the investor helps increase essential olive oil production, makes m