With olive oil consumption on the rise in Jordan and globally, the government has a powerful incentive to enhance the production and export of the country’s high-quality oil. If quality assurance standards are introduced and marketing strategies are improved, the world’s eighth-largest producer looks set to have a promising future in the medium-term.
LOCALLY PRODUCED, LOCALLY USED: Some 75% of Jordan’s oil is consumed locally, and a growing number of Jordanians are buying the product. “People are gradually coming to see its health benefits,” said Hakam Barakat, business services specialist at producer Barakat Modern Farms. The remaining oil – around 7000 tonnes in a good year – is exported, mainly to Gulf countries, but also to the US, Europe and elsewhere. With this small offering Jordan makes up 0.3% of global exports, according to the International Olive Council.
However, “local production is increasing faster than local consumption, so the amount available for export should increase over time,” said Luay Alshaikh, a farm manager affiliated with the Jordan Olive Products Exporters Association (JOPEA). He said several Saudis and Emiratis had invested in sizeable Jordanian olive plots and are exporting part of the produced oil to the Gulf.
Producers are not, however, anticipating a sudden export boom. “Jordan cannot compete with Spanish and Italian prices,” said Barakat, stressing that the government should incentivise the industry financially, especially in the wake of rising electricity and fuel costs. In late 2011, the Ministry of Agriculture announced it was forming a higher council responsible for assuring oil quality and enhancing the ability of Jordanian brands to better penetrate international markets.
PUSHING FOR PURITY: Quality assurance is of critical importance in a country where mixing pure olive oil with lower-quality oil is an ongoing problem. While the end product can be difficult to distinguish from the real thing, it is much cheaper to produce. As a result, prices come down and oil producers make smaller profits. “You cannot prohibit the mixing of oil, but mixed oil should be labelled as such,” Sijal Majali, general manager of Rum Agricultural Company, told OBG. Others argue that the government should implement a ban on poor-quality imports. A solution to this issue should prove a real boost to oil exports. While the country’s five largest producers are currently certified to supply Europe and America, they remain the minority.
THE NAME COUNTS: Effectively branding Jordanian oil for a competitive international market is an area generally considered in need of improvement. “There is certainly the potential for consortiums to be formed under unified brands, but it will be an uphill battle if people cannot learn to work together,” cautioned Barakat, citing an unsuccessful attempt by producers to form a consortium several years ago.
FLUCTUATING PRODUCTION: Long-term trends suggest that Jordan is producing increasing quantities of both olives and olive oil. Alshaikh estimates that an average of 15,000 tonnes of oil was produced annually over the last decade, but expects this figure to hover around 27,000 in the years to come. More olive trees are planted every year, he added. There are currently around 17m producing trees in the country.
Annual produce, however, tends to fluctuate greatly. For example, dry weather can result in serious losses. “In 2008/09, production was down to a quarter of typical levels due to a severe lack of rain,” said Alshaikh, although this is rare. Since 2009, oil production increased notably: the 2010/11 season produced 22,950 tonnes, according to the Department of Statistics, and 2011-2012 saw 27,000 tonnes, said Alshaikh. Trees are also influenced by the “alternate bearing habit,” whereby yields peak and trough in alternate years.
Roughly 65% of the land used for olive production is rain-fed, while irrigation is required in the remaining 35%, mainly in the eastern desert areas, according to Alshaikh. Although plans are under way to encourage Jordanian farmers to find alternatives to irrigation, it remains unlikely that the government would forcibly limit the use of irrigation in the immediate future.
Read More from OBG
