Competitiveness of the Brazilian extra virgin olive oil productive chain

Abstract

The olive tree is one of the first cultivated plants and is associated with ancient traditions, customs and eating habits of the Mediterranean basin. Recently, the benefits to nutrition and health have encouraged cultivation in several countries. Brazil is the second largest importer of olive oil and olives, with commercial production less than 1% of consumed volumes. Import substitution suffers from the resistance of technological and organizational innovation challenges in the production chain. The objective of this study was to analyze economic aspects of the emerging Brazilian extra virgin olive oil industry, with emphasis on obtaining information on the productive efficiency of olive groves and mills, indicators of comparative advantages and competitiveness coefficients, in addition to generating metrics on the effects of some policies that distort prices paid and received. The results achieved indicated several useful aspects for business management, important for sector governance and allowed the accumulation of information essential to the development of new knowledge and technologies. The prices observed in the chain links showed that Brazilian olive farming is profitable and competitive, even with high levels of taxation and possible market failures. The low yields of olive groves to date have been compensated by the high prices obtained for extra virgin olive oil at retail, well above the international average. In this sense, as volumes and competition increase, more technological and organizational innovations will be needed to increase productivity and promote sustainability.