Olive report by nedal marei


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Olive report by nedal marei

  1. 1. Palestinian olive oil export and international demand Submitted to: Dr. haya sammanehSample of report in partial of the requirments of principles of sicntific research and technical writing course (64300) Prepared by: Nidal Marei Allam abu al-hasan Department Computer Engineering An-Najah National University October 20, 2011 1
  3. 3. List of figure:Figure 1: Quantity of olives pressed and oil extracted in the occupied Palestinianterritory, 2001-2009. Source: Palestinian Central Bureau of StatisticsFigure2: export of olive oil. 3
  4. 4. Acknowledgment:I would like to thank all people who have helped make this report success, first Dr.hayasamaeneh who gave us this chance to write this kind of report. I would also to thank allpeople and organizations to give us the most important information for this report. We alsowish to give special thanks for our grandfathers who helped us a lot in this report. Thank you all 4
  5. 5. Abstract:In this report we discus the demand and export for the olive oil in Palestine which is themost product in this country, and also we have collect a lot of information about this issueand about production of oil yearly which is nearly 30,000 tons.We find that Palestine have a lot of tons of olive oil out of consumption about 15,000 tonswhich use for storage or export .And because of the Israeli occupation the number of exported is very low. For example at2000-2004 the average of exported oil is 600 tons and at the next year in 2005 the exportedoil was about 6000 tons and it was about 2000 tons in 2008.This different number of exported oil because of a lot of problem which control of theproduction oil and some political problems which we discuss in this report. 5
  6. 6. introduction:overview:For thousands of years, the olive tree has been an integral part of the Palestinianlandscape: a symbol of Palestinian identity, culture and tradition. The majority ofPalestinian farmers are at least partially dependent on olive cultivation. The currentprofitability of olive farming is evident in the increase in recent years of farmers whoare planting new trees and tending to their orchards. Olives are a centuries-old mainstay of the Palestinian economy, with the soil andclimate producing some of the of the world’s highest quality olive oil. The olive isalso symbolic of Palestinians roots in, and attachment to, the land. Some 45% ofagricultural land (over 900,000 dunums) is planted with an estimated 10 million olivetrees, with the potential to produce between 25,000 – 35,000 tons of oil.Approximately 93% of the olive harvest is used for olive oil, and the remainder forpickles, table olives, and soap. Up to 100,000 families depend upon the olive harvestfor their livelihoods to some extent. The vast majority of the harvest is consumeddomestically, with a small amount exported abroad, principally to Jordan, withincreasing interest and demand from the international organic and free trade markets.(unrwa, 2008) The olive industry promises to contribute over US$ 123 million to the fragile WestBank economy - 18% of total agricultural production. However, the movementrestrictions and obstacles imposed by the Israel Defence Forces (IDF), which reduceaccess to land and markets; the Barrier which separates many farmers from their olivegroves; the closure of the Gaza Strip crossings; and the increasing attacks anddestruction by Israeli settlers against farmers and olive trees, combined raise concernsabout the potential success of this peak olive season. When the harvest is complete, the next stage is for farmers to send the fresh olives tothe approximately 270 licensed commercial olive presses in the West Bank. This mustbe done quickly otherwise the quality of oil is reduced. Once the oil is pressed andpackaged, farmers need access to markets to sell their goods. However, Israelimovement restrictions affect access to fields, markets and processing, raisingtransport costs and impairing delivery schedules. The blockade on the Gaza Strip alsoaffects imports of olive oil from the West Bank. In the 2006/2007 year harvest, therewas a surplus of 7,000 metric tons of olive oil, worth approximately US$ 28 million,which went unsold. Prices fell below cost price, heavily affecting farmers. (unrwa, 2008)Because of high production of olive oil, Palestinian farmers and government alwaystry to export olive oil outside Palestine so that will affect in a good way to oureconomy to be equally with the international demand and to be comfortable with thechange of oil production because of change of some reasons like climate and Israelioccupation . 6
  7. 7. Methodology:In this report we try to collect the trusted information by visiting a lot of web pagesand some of government offices like Ministry of Agriculture, and some by callingthem by telephone or communicating with them by email. 7
  8. 8. Result and discussion:Markets and PotentialExport has never been a focus for the Palestinian oil producers and the majority of theproduction is for the local market. Average consumption is estimated at around 12,000tons per year and in low yield years very little oil is available for export1 (bank, 2009).Inhigh yield years, part of the production in excess of consumption is stored for thefollowing low years and the remainder is exported. In the past there was usually anexcess of 3,000-5,000 tons in good years2 (Council, 2008).However, production hasdramatically increased in the last few years and, as noted above, is expected to reach over30,000 tons in the 2006 season. This will leave a large surplus of well over 15,000 tons,available for export or storage.Historically the majority of exports have been to Jordan or the Arab market in Israel,where consumers have similar preferences to the Palestinian market. But Jordan hasdeveloped its own olive oil industry and has taken steps to virtually end the flow ofPalestinian oil except as gifts. The Israeli market has become increasingly difficult toaccess because of the closures. In 2004/2005, a combination of a calmer political climateand a good olive harvest led to a strong recovery, and by some guesses as much as 5000to 6,000 tons of oil was sent to Israel, up from an average of 600 tons in the years 2000-2004. But this surge in exports to Israel is unlikely to last once the wall is completed andit becomes ever more difficult for Palestinians to access the Israeli market.While the Palestinian Territories have lost the Jordanian market, their exports arebeginning to make inroads into other Arab countries. Much of exports are in the formof “gifts” to relatives who consume part and then sell the rest commercially. However,there are some large commercial sales. In 2004 Saudi Arabia imported over 300 tons ofPalestinian oil and recently Palestinian producers have made small forays into Yemen andChina, which demonstrates the promise of new markets2. (Palestinian Central Bureau ofStatistics Estimates, 2007) However, the potential for bulk exports of Palestinian oil islimited because of the cost of production.Recently, a new and potentially significant market for high end, extra virgin or organicbottled olive oil has begun to develop in the Arab Gulf, Europe and North America.The Palestinian climate and soil enable the production of some the of the highest qualityolive oil in the world. The oil has a unique taste and aroma that has been recognized intaste tests conducted by certified testers in Europe. Most of the current production isclassified as at least ordinary virgin, since the local market has no demand for high qualityoil. But with some effort it is possible to produce large quantities of extra virgin oil inthe West Bank. Along with these natural advantages, Palestinian oil has uniquemarketing options. It can be branded as oil from the “holy land”, and in some Arab andethnic markets it will draw support to assist Palestinian labor. In addition, becausePalestinian farmers have not been able to afford chemical fertilizers and pesticides, it isrelatively easy for many producers to enter the high value organic market. 8
  9. 9. A handful of enterprises have emerged in the last three years to tap this potentially richmarket. Local producers estimate that small bottles earn 15-20 percent more than bulkexports and organic oil can earn as much as 40 percent more. Some of the enterprisesare cooperatives selling under a mantel of fair trade while others are strictly privatecommercial operations. High quality, bottled oil has been successfully exported to Japan,Europe, the Arab Gulf and North America, but so far shipments have been irregular andin limited quantities. Fair trade exports were only around 500 tons in 2005 . However,bottlers plan to take advantage of the high yield expected in the 2006 season todramatically increase exports. Local producers estimate that in 2006 nearly 20 percent ofPalestinian production will be extra virgin, up from five percent in 2005.Constraints to ExportsThe export market is primarily constrained by the relatively high cost of productionresulting from a combination of the cost structure inherited from the Israeli economyand low productivity. Low productivity is partly attributable to the nature of the terrain;the steep slopes, infertile soil and poor rains. But farmers could still do much more toimprove yields, especially on older trees. Better pruning techniques and improved use ofchemicals would significantly enhance output, and more careful handling would increasequality. Irrigation is a priority. Olive trees are drought resistant but partial irrigationwhen the fruits are blossoming and the rains have stopped early, could substantiallyincrease yields. However, Palestinians will need full access to water supplies, andremoval of any Israeli restrictions from digging new wells or developing new irrigationprojects.The current movement restrictions and closures have a significant impact on the cost ofproduction and value of the olive crop. Palestinian farmers in the West Bank now faceover 500 physical obstacles and closures restricting their movement; a 40 percentincrease since 2005 . (un, 2006) Farmers are often prevented from accessing their treesmaking it difficult to prune the trees, plow and control weeds, which reduces yields.More importantly, while oil will not deteriorate while awaiting shipment, high quality oilrequires that the olives be harvested at the correct time and pressed immediately afterharvest. Delays in harvesting or in moving harvested olives to the presses reduce theyield and quality of oil produced. Most problematic is the uncertainty caused by theclosures. Producing high quality oil that is suitable for the export market requires largeinvestments to build storage facilities, modern presses and to teach farmers properharvesting methods. If producers are unsure that they will be able to obtain thenecessary olives they will be unwilling to make the investment, and will continue the lowrisk strategy of producing low quality bulk oil.The movement restrictions also raise transport costs. Since the restrictions areconstantly changing it is impossible to quantify their impact. But some idea can beobtained from the overall transport costs. One exporter estimates that a 20 footcontainer to Europe costs $2000, about 10 percent of the total costs of production andmarketing. $400 of this is internal transportation; the cost moving the container to theport, which he believes has doubled since the beginning of the most recent Intifada. Inaddition, Palestinian producers have to pay a $200 per container security fee that Israelishippers do not face. Because of the difficulty in clearing goods through Israeli securityalmost all Palestinian bottlers buy their packaging and machinery from Israeli suppliers. 9
  10. 10. 7000600050004000300020001000 0 2118 2115 2114/2115 2111/2114 figure 2: export of olive oil 11
  11. 11. Conclusion and recommendations:• The Ministry of Finance should increase budgetary allocation for the agriculturalsector, including the olive and olive oil industry, which is currently very low.• The Ministry of Agriculture should prioritise resources to provision of agriculturalextension services. This would ensure that farmers have the knowledge to improveagricultural practices and techniques, thereby enhancing the productivity of oliveorchards.• The Ministry of Agriculture should broaden the scope of its interventions to includeall actors within the value chain, which would improve the quality of olive oil andincrease market opportunities.• The Ministry of Agriculture should ensure that the Palestinian Olive Oil Council isgiven more resources to represent the olive oil sector in an inclusive and participatorymanner and to ensure the implementation of the sector strategy currently beingdeveloped.• The Palestinian Olive Oil Council needs resources to increase its presence within thegovernorates so that olive farmers, and other actors, have access to and a voicewithin, decision-making processes which impact their lives.• The Palestinian Olive Oil Council should proactively engage with all stakeholders toensure they are aware of its mandate and terms of reference.• The Palestinian Standards Institution, Ministry of Agriculture and Ministry ofNational Economy should enforce the Quality Chart for Olive Oil to ensure aconsistent quality of olive oil for both local and export markets.• The Ministry of Agriculture should promote and support organic and fair-tradecertification, whilst ensuring that conventional olive oil remains affordable fordomestic consumption.• The Palestinian Authority should continue to develop greater regulation over andcontrol of agricultural imports, particularly olive oil, coming into the West Bank, andimpose stringent labelling regulations for locally produced olive oil, in order toprotect Palestinian olive farmers from the import of foreign oils which compete onthe domestic market. 11
  12. 12. Refrences:Palestinian Central Bureau of Statistics Estimates. (2007). ramallah.bank, w. (2009). Brief Overview of the Olive and the Olive Oil Sector in the Palestinian Territories.Council, O. O. (2008). Olive Oil Council and PALTRADE.estimate., M. o. (2009). Brief Overview of the Olive and the Olive Oil Sector in the Palestinian Territories. world bankk.Estimates, P. C. (2007). Palestinian Central Bureau of Statistics Estimates.un. (2006). UN 2006 Olive Oil Fact Sheet.unrwa. (2008). T h e O l i v e H a r v e s t I n T h e We s t B a n k A n d G a z a. 12