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A portrait of Italian olive oil world by Istat

The structure and solidity of the area, the contribution and potential of extra virgin olive oils with original denomination. Useful data to understand the production in Italy

The present study analyzes the olive oil productions in Italy focusing on the evolution of the weaving factory of extra virgin olive oils recognized and protected by European Union (EU) by means of the DOP (Protected Designation of Origin) or IGP (Protected Geographical Indication) labels. This study is based on the official data published by the National Institute of Statistics (ISTAT) of Italy on the following investigations: surveys of cultivations, investigation on the structure of farms, surveys on the DOP, IGP and STG food farming products, foreign trades, national accounting. The results collected by COI (International Oleic Council), ISMEA (Institute of Agricultural Market Studies), and Qualivita Foundation are included as well. The analyzed data are referred to the years since 2004 through 2009 and allow to portray the general solidity of the area, and the contribution and potential of DOP and IGP extra virgin olive oils.

The scenario

The structure of the olive oil industry in Italy has been relatively stable over the last few years. In 2009, the surface dedicated to the olive tree growth for oil was 1.16 million hectares; such area includes the surface not yet productive (because recently planted) too, whose size is just 20 thousand hectares. The production, after the peak of the year 2004, has been quite stable, although some variability was due to pathogenic attacks and to the rotation of productivity in the different areas of the country; in 2009, it amounted to 3.7 million tons, with only 100 thousand unpicked.
Olives for oil represent about 98% of the total production of olive trees, and their yield is slightly below 18%.
Just like the olives production, the oils production in the period from 2005 till 2008 was stable; in 2008, it amounted to 0.61 million tons. The Italian oil represents almost one quarter (23.5% to be exact) of the world oil produced in 2008, according to COI data. The territorial analysis for 2008 is very interesting: the production is mostly concentrated in the South of Italy (78.8% of the national production), with a moderate presence in the Center (18.8%) and a niche presence in the North (2.4%). The main producers of olives in the South are Puglia, Calabria, and Sicily, which respectively have 377, 192 and 159 thousand hectares of cultivations; in the Center, Tuscany and Lazio are the main players with respectively 97 and 88 thousand hectares. The more consistent producer in the North is Liguria, with 17 thousand hectares. The highest yielding producer in 2008 was Calabria (5.5 tons per hectare, 19.3% of olive yield).
The study on the Italian farms concerned more than 53 thousand farms, and represented the main survey of the agricultural business in the whole EU. It was carried out by sample survey and direct interview at regional level. At times, these results showed some discrepancy with the results of the previous investigation on the cultivations, that was realized in a very much detailed way at provincial level. This study, though, allows to analyze the number and features of the farms and of their entrepreneurs. The latest survey, dating back to 2007, found that 853 thousand olive oil farms are present in Italy; 75.8% are located in the South, 63.3% on hills, 14.8% in the mountains. The surface cultivated with olive trees is 18.7% of SAT and 24.1% of SAU. One third of entrepreneurs are women (33.7%) and the average age of entrepreneurs is rather high: 45.7% are older than 65, only 5.9% are younger than 40. 71.7% of all of them have at best a middle school education.

Foreign trade

Italy both exports and imports oil. The commercial balance for olives is negative: in 2008 the loss was 13.3 million euro for table olives, and 1.5 million euro for oil olives. As regards oils, 517.3 thousand tons were imported in 2008 for a value of 1.3 billion euro, with respect to 336.21 thousand tons exported for a value of 1.2 billion euro.
On average the price of Italian oil, which was of 3500 euro/tons in 2008, is about 1000 euro higher than imported oils. These data tell a significant story about the quality of Italian oils, and its commercial impact.

The value of oils

The national accounting for the year 2008 determined a value of 1.77 billion euro of oil, which adds up to 2.0 billion counting the 0.23 billion of the olives. This value marks an increase from 2007, which compensated the reduction in the unit value. The most relevant data anyway show a consistent and continuous decrease in the years from 2004 till 2008 of the unit value, from 3630 down to 3160 euro per ton. (-13.05%).
The overall quantity of whole olives (oil olives for the oil industry, table olives and olives residues) went down from 0.48 to 0.32 million tons in the same period; on the other hand, the unit value grew from 520 to 720 euro per ton, which helped maintain basically unvaried the total value
In conclusion the value of the olive industry products for 2008 posted an increase from 2007 (+5,26%) and a decrease from 2004 (-30,07%).

High quality extra virgin olive oils

Nowadays, 38 oils are recognized and protected by UE; 37 are DOP and one (Olio Toscano) is IGP. All these products are certified on the basis of regular controls on the cultivation, the production of olives and the process to obtain extra virgin oil. 5 more DOP brands are under temporary protection as theuy wait for the European recognition. 10 more are undergoing the process to obtain the DOP recognition. In total, there are 53 products under protection, currently or in the next future. 38 more make the list of traditional guaranteed products, which is decided by the Regions and approved by Mi.P.A.A.F. (Ministero delle politiche agricole, alimenti e forestali, basically the Agriculture ministry), and which normally represents the step before obtaining the DOP or IGP label.
In total, 91 extra virgin olive oils of great and acknowledged quality are produced in Italy and represent a relevant agricultural and cultural legacy of great economic and social value. These products are obtained thanks to a centuries old bond between the work, the traditions and the history of man, and the evolution of the agricultural landscape in territories where the olive represents the civilization and has allowed to maintain and develop the population.
Last but not least, the Italian extra virgin olive oil is a formidable representative of the “Made in Italy”, both in the food export and in the cultural, touristic and gastronomic national circuit.

The weaving factory of DOP and IGP oils

The yearly survey by ISTAT in collaboration with MiPAAF on the DOP, IGP and STG products allows to analyze the productive structure and the evolution of extra virgin olive oils.
The first survey from ISTAT, in 2004, showed that 29 oils (for 35 recognized by EU) were produced by a total of 20.9 thousand farmers, who work on 86.9 thousand hectares; 1.8 thousand workers were active in the field of the transformation, e.g. bottlers.
After a reorganization of the certification inherent to Umbria oil during 2005, a correct comparison should refer to the data from 2005 to 2008. In 2005, the olive industry included 17.4 thousand farmers, with 78.1 thousand hectares for the oil olive and 1.6 thousand workers in the transformation field. In 2008, these numbers were respectively 18.2 thousand (+4.7%), 88.8 thousand (+13.8%) and 1.6 thousand (stable), with 2.4 thousand transformation plants. The distribution of the operators working at DOP and IGP oils in the country was very different than the olive oil industry in general: the largest part of the farms (11.1 thousand, 61.2% of the total), of the surface (56.3 thousand hectares, 63.4%), and of the transformers (0.7 thousand, 42.2%) is located in Tuscany, whose oils is the giant in Italy, with 2 DOP oils (Terre di Siena e Chianti classico), 1 IGP (Toscano), 11 thousand olive farmers, 52 thousand hectares, 0.5 thousand transformers.
Surprisingly, the South is slightly more relevant than the North, with a number of farms equal to, respectively, 2.7 and 2.2 thousand; the lands in the South (19.8 thousand hectares) is only one third than in the Center.
The 81.7% of farmers, 79.7% of the cultivated land, 80.1% of the transformers, 77.1% of the transformation plants is located in the hills.
Women manage 32.4% of the farms versus 67.8% of men.
The development of the industry is confirmed by the activity of 38 oils for 38 in 2008, while in 2005 only 32 out of 37 were active.
The surveys and elaborations by ISMEA quantitate either the certified production and the value of the production and the consumption on the national market. In the years 2004-2008, the certified production went up from 5.0 thousand tons to 8.5 (+3.5 thousand tons, +69.2%); the value of the production from 50.2 to 59.8 million euro (+19.1%). This trend was due to the constant growth in the DOP and IGP production, and to the decrease of the price per ton (from 9.96 thousand to 7.01 thousand euro, -29.6%).
On the other hand, the value of the consumption on the national market markedly increased from 44.8 to 72.5 million euro (+61.7%).
In 2008, according to data from the control agencies and the tutelage consortia, ISMEA determined that 26.0% of DOP and IGP oils (2217.4 tons) was commercialized abroad with an export invoice of 26.3 million euro; the average unit price of the exported oil was 11.86 million per ton. Adding this value up to the national value, the total is almost a hundred million euro (98.8). This marked a 65.2% increase from the production value; therefore the production value grew from 7.01 thousand euro to 11.58 thousand euro, per ton of DOP and IGP oils.
According to Qualivita foundation, 65% of export is towards EU and 35% to extra EU countries. In Italy, the small productions mostly sell directly to customers; major producers mostly sell through the great distribution, that trades about 80% of Toscano oil.

Conclusions and forecasts

The productive structure of the Italian olive industry have been quite stable over the last few years. The ageing of the entrepreneurs is worrisome and the low education of most does not help an evolution of the farms. The strong concentration of the plants on the hills is a key feature of the landscape. The environmental conditions affect either the development of pathogens and the quantity and quality of the production. The value of the production and of the consumption is affected by the costs of the production and of the labor. Both DOP and IGP productions have good chances of developing although their prices are considerably higher than brands that are not recognized and protected by UE. High quality oils are a guarantee for the “Made in Italy”. In summary, the DOP and IGP productions are, even in hard times for economy, the best chance for a recovery of the agriculture and food area.

by Mario Adua
02 august 2010, Technical Area > Olive & Oil