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

Olive oil is turning up in increasingly more kitchens and on an increasing number of dinner tables across the world. The oil is cherished by cooks, enjoyed on salads, and healthy for the heart. 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 was previously that virtually all olive oil was produced together with consumed round the Mediterranean and in the Middle East. Production has been sufficient for local (Mediterranean Basin) demand. As worldwide demand increases olive trees will be planted and essential olive oil produced outside the countries which have historically been the leading producers. This is a big trend which will need capital and those who have the foresight may well benefit from investment in growing, refining, exporting, distributing, or selling essential olive oil in regions as diverse as the UK, India, Japan, China, or the united states.

Olives and Who Makes the Oil

Folks 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 who are the major producers at 36%, 25%, and 18% of worldwide production in accordance with recent figures. As demand for more olives and much more oil goes up these countries will probably not be able to answer the call. Greece, for instance, 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 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 top 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’ll step in to make more as worldwide demand multiplies? What type of olives will work the very best in what locations and who’s going to invest the administrative centre to make all this work?

Where Are Folks Going to Plant Olive Trees?

Olives are grown across 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 opposite side of the Mediterranean Sea for the current major producers, Spain, Italy, and Greece. Tunisia (8%) and Morocco (3%) are already in the most notable 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 Sea. Its climate is Mediterranean. Olives are grown for food and oil already in Algeria however the infrastructure is not present on a sufficiently large scale to refine enough oil promptly enough to produce export quality oil. A major factor here’s having enough processing plants dedicated to a couple of orchards and the infrastructure had a need to pick and process in a timely manner. EB1 Another factor has been that of foreign connections for export, marketing, and sales.

It turns out that folks ‘re going plant a million hectares of olive trees in Algeria. That is, for those from the united states, 2.5 million acres. If planted in one block it would be 100 kilometers or 62.5 miles on a side. Foreign investors are bringing their expertise and capital to this project. In addition foreign companies are setting up projects so as to 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 undoubtedly be expertise in choosing olive varieties, the building of an adequate amount of modern oil mills and the connections for export and distribution.

An example of a promising project in Algeria is one by way of a Spanish firm. This company has a subsidiary in Algeria. Through the subsidiary the business will plant 1, 500 hectares of the Arbequinia olive. This is a variety ideal 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 create 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 world.

As projects like this take hold the world wide demand for top quality oil will undoubtedly be satisfied. As private companies attract investors to this sort of profitable undertaking they will attract the necessary capital that has often been missing in order to create 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 “little bit of the action.” After 3 years once 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 more than $4,000 to the investor along with 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 essential olive oil production, makes m