Evolution and opportunities of olive oil exports in Latin America

Olive oil is an essential pillar in the Spanish food industry. In terms of production, our country covers 70% of the EU production and almost 50% of world production. With regard to international trade, Spain has led olive oil exports to the foreign market in 2021, in addition to being the third most exported agri-food product from our country, behind pork and citrus. It is followed by Italy, Portugal, Greece and Tunisia as the main competitors.

According to the Foreign Trade Bulletin of olive oil for the 2021/22 campaign carried out by the Ministry of Agriculture, Fisheries and Food, the value of Spanish international exports of olive oil was 3.451 millions of USD in total, 25% higher than the previous campaign. If we talk about volume, there were 1,080,107 tons exported in this campaign, assuming a reduction of 1%. Although it is true that the volume exported has been lower, the value of sales has raised due to the increase in prices. This increase is caused by several factors: droughts between the end of 2021 and the beginning of 2022 and increased extraction and energy costs, among others.

As the main destinations for Spanish exports, Italy, the United States and Portugal lead the podium. Regarding the Latin American market, Brazil, Colombia and Mexico occupy positions 11, 12 and 15 respectively in the ranking. Although Latin America is not the main destination in the world where our liquid gold goes, it is worth highlighting several success cases and good reception of the product in different countries, as well as opportunities and positive prospects.

The most representative Latin American market is Brazil. During the period between the months of October 2021 and September 2022, the value of exports to this country was 88,28 millions de USD. Regarding the origin of olive oil exports, Portugal is the main supplier, with a market share of around 66%. Spain is in second place, with around 16%.

The case of Andalusia stands out, which, during the first six months of 2022, reached a sales value of 20 millones de USD. Extenda, an Andalusian foreign promotion company, indicates that an annual growth of 9.8% is expected from 2021 to 2025 in this market, due to the fact that in Brazil olive oil is more and more consumed and valued more, characterized by the benefits it brings to health. In addition to this, in order to take advantage of business opportunities in the Brazilian market, this public body launched in September the new commercial mission to Brazil, which included the participation of firms such as Aires de Jaén and Migasa.

Secondly, Mexico also predicts a promising future for Spanish olive oil. In the Aztec country, Spain is the leader in sales, with an average market share of 87% in both value and volume, according to a study carried out by ICEX. The change in habits towards healthier consumption has led to an 84% increase in sales in this country between 2019 and 2021. Last year, sales of this product to Mexico had a value of close to 84,2 millions of USD and 21,322 tons. This means that 91.09% of the imports to this country came from Spain.

Without a doubt, Mexico is a country where the success of olive oil should continue to be taken advantage of. The image that Mexicans have of our product is of a high-quality good, enjoys great prestige and is introduced into all food distribution channels.

The third most important market is Colombia. Spain is the main supplier of this country, with an export value of approximately 38,1 millions of USD in 2021, 34.6% more than the previous year. In terms of volume, 8,484 tons of olive oil were transported to Colombia. This market is characterized by having a consumer who values this product as gourmet. A study of demand behavior carried out by Juan Vilar, an international olive oil analyst, points out that of the most consumed varieties, olive oil stands out with 37% and extra virgin olive oil with 34%.

In the next position is Ecuador, with Spanish exports of olive oil worth 4,8 millions of USD in 2020 and 7,6 millions of USD. As the last country we have Peru, where it went from 3,3 millions  of USD to 3,4 millions of USD. In both markets there has been an increase in sales and the demand for Spanish olive oil is growing, so we should take advantage of the good reception of the product in the upcoming years.

The signing of the EU-Mercosur agreement, which includes trade between the European Union and Argentina, Brazil, Uruguay and Paraguay, presents one of the greatest advantages for Spanish olive oil to compete against other exporters. With the reduction or even elimination of tariffs, Spain will be able to compete in quality and price with big players in this market such as Italy, Greece or Portugal.