The Need to Increase ESSENTIAL OLIVE OIL Production Can Lead to Offshore Investment Profits

Olive oil is turning up in more and more kitchens and on more and more dinner tables throughout the world. The oil is cherished by cooks, enjoyed on salads, and healthy for the center. Over the last 2 decades this combination of factors has led to increased consumption far beyond the Mediterranean Basin, the original home of the olive and its own oil. It used to be that virtually all olive oil was produced and consumed round 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 the countries that have historically been the leading producers. This is a big trend that will need capital and those who have 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

People have been making oil from olives so 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 according to recent figures. As demand for more olives and much 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 olive oil producers, come Tunisia (8%), Turkey (5%), Syria (4%), Morocco (3%), and Portugal (1%) in exactly the same recent set of figures from 2005. These countries, from Spain at the very top down to Portugal, produced 90% of the world supply in 2005. Almost every other nation produced significantly less than 1% of world production. A large part of this is that olives are native to the Mediterranean Basin and grow best there. media coverage It isn’t just a matter of the plant surviving but that it produces top quality olives for refining into exportable oil.

As the figures show a handful of producers currently make the oil from olives. Now the question is who’ll step in to make more as worldwide demand multiplies? What type 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 Likely to Plant Olive Trees?

Olives are grown throughout the world however they work best in the Mediterranean Basin. The space, climate, and soil conducive to growing exportable quality olive oils are on the contrary side of the Mediterranean Sea for the current major producers, Spain, Italy, and Greece. Tunisia (8%) and Morocco (3%) already are in the very best seven producers. Now Algeria, the second largest nation in Africa is planning for 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 but the infrastructure is not 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 set of orchards and the infrastructure had a need to pick and process in a timely manner. Another factor has been that of foreign connections for export, marketing, and sales.

It turns out that men and women ‘re going plant a million hectares of olive trees in Algeria. That’s, for those from the USA, 2.5 million acres. If planted in a single block it would be 100 kilometers or 62.5 miles on a side. Foreign investors are bringing their expertise and capital to this project. Furthermore foreign companies are establishing projects so as to attract the foreign capital essential to plant orchards, tend orchards, pick olives, process olives to oil, and send processed oil through 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 will bring 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. It is a variety suitable for intensive culture. It is drought resistant and cold resistant. The small tree yields 20% weight per volume of oil from its small brown olives and established fact for the excellent taste of its oil.

The company will create a modern processing plant to make sure prompt refining into high quality oil for international markets. It’ll 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 worldwide demand for top quality oil will be satisfied. As private companies attract investors to the sort of profitable undertaking they will attract the necessary capital which has often been missing to be able to develop a complete supply chain and enhance profits.

To keep 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 “little bit of the action.” After three years when the Arbequinia olive starts to create 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 essential olive oil. At $2 a liter this is a lot more than $4,000 to the investor on top of yearly interest. 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 olive oil production, makes m