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MONDAY, 21 APR 2014
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Olive oil survives foreign competition
The decrease in Syrian imports has reduced competition for local olive oil producers.
The decrease in Syrian imports has reduced competition for local olive oil producers.
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BEIRUT: Lebanese olive farmers and olive oil producers have been facing a slow season, but fewer imports from war-stricken Syria and slightly higher prices have allowed this sector to survive, according to experts.

“Last year was exceptional both in quality and quantity; this year is a bit different with production generally lower but varying from one area to another,” Tony Maroun, owner of Atyab (the producer of Boulos olive oil) told The Daily Star.

“But it is not a bad year ... [an approximate] 20-percent increase in pricing is helping farmers sustain acceptable levels of profit in spite of increases in production costs, particularly labor and fuels,” he added.

A raging civil war in Syria has meant that it is harder to transport cheaper olive oil across the border, most experts contacted by The Daily Star said.

Syria produces more than 960,400 tons of olives per year, while Lebanon’s produce stands at 97,600 tons, according to the last estimates by the U.N. Food and Agriculture Organization in 2010.

According to Maroun, the lower produce quantity did not mean quality was also bad. “The quality of olive oil produced this year is very good, particularly in the groves well taken care of by farmers,” he said.

Others experts, however, said prices have either been flat or have decreased, arguing that despite lower imports from Syria, dumping of low-grade and forged oil is still common-practice particularly for olive oil used by restaurants and oil-bottling companies.

Despite agreeing that olive oil imports from Syria have declined, the head of the Lebanese Farmers Association Antoine Howayek told The Daily Star that Moroccan and Tunisian olive oil still corner Lebanese olive farmers.

“This is a structural problem. Under the Greater Arab Free Trade Agreement, olive oil from Tunisia, Morocco and Syria, all far bigger oil producers, can enter the Lebanese market with few restrictions and regulations,” he said.

Howayek also said olive prices in Syria have plummeted from around 50 Syrian pounds (around $0.7) to less than 30 Syrian pounds per kilogram after demand fell sharply as violence escalated in the country.

“This could risk a sudden outbreak of imports, which has not happened yet because of the lack of security [in Syria],” he said.

The lack of standards enforcing rules of origin leave local farmers and consumers alike victims to forged olive oils, including those mixed with cheaper vegetable oils and colorants, he said.

Most industrial producers prefer to source their olive oil from North Africa instead of opting for more expensive local oil. “And they are being allowed to label it as they wish,” Howayek added.

Farmers still face severe difficulties in marketing their produce, Howayek added, highlighting that most sales of olive oil usually happen on a person-to-person level.

This is particularly devastating to farmers, he said, given that significant amounts of olive from last year’s season remain unsold. Fresh olive oil is considered to be of superior quality and markets at much higher prices.

Echoing Howayek’s views, The Daily Star’s correspondents in north and south Lebanon reported that many olive farmers have been complaining about sluggish sales this year with prices per 20-liter canister ranging from $80 for last year’s oil to over $100 for newly pressed oil. The situation in the south appeared to be better.

Howayek’s and Maroun’s views on how to develop the olive oil sector are quite different.

While Howayek believes Lebanon should restrict imports and seek to protect farmers from foreign competition, Maroun, argues that the industry should try to take the niche olive oil markets outside the country.

“Even if we have to resort to importing lower-grade olive oil because of our limited production capacity, we have to focus on entering foreign high-end markets,” he said.

Many local producers have been increasingly successful in doing so, including Youssef Fares, owner of Olivetrade, an organic olive oil company. Zejd, Olivetrade’s brand of high-quality olive products, has tapped international markets, including France, United Kingdom, Kuwait and Canada.

Most recently the company has been successful in entering the Japanese market, he told The Daily Star.

Even demand for organic olive oil in local markets is high, Fares said, adding that the lack of production puts farmers who opt to go organic in a very favorable market position.

“Indeed Lebanon could specialize in high-end olive oil including organic varieties. This requires farmers to get proper certification and put quality first, but [they] have the potential to become competitive in this market,” he told The Daily Star. – Additional reporting by Antoine Amrieh and Mohammed Zaatari

 
A version of this article appeared in the print edition of The Daily Star on November 21, 2012, on page 5.
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