Investing in plantation properties not only allows for a profitable investment, but it also offers, in contrast to other financial products, security of the investment. Its profitability is kept constant and in times of need, the land maintains its value through the possibility of crop rotation.
With the super-intensive system, costs are covered as harvesting is possible by the second year after planting. By the third year, cultivation production becomes stable yielding anywhere between 1500 kg and 2000 kg of oil/ha, depending on soil and climate. A return on the plantation investment occurs between years 6 and 7.
The cultivation of olive groves is unique to Mediterranean climates which are characterised by mild winters and long warm dry summers.
Olive groves around the world:
The number of viable and productive areas that make olive groves possible around the world is limited. In almost all of these zones, olive production has remained traditional producing a quantity of oil that is far below the worldwide demand.
The consumption of olive oil around the world is much lower than other vegetable oils, making up only 2% of the world’s intake in comparison to 35% from palm, 27% from soybean, 15% from rapeseed or 9% from sunflowers.
Production of vegetable oils in the world
Consumers are now becoming aware of and appreciating the health benefits that extra virgin olive oil has to offer. WHO claims of the harmful properties of palm oil, the most widely consumed oil in the world, shows that the demand for virgin olive oil still has a long road ahead.
Countries like India, China or Japan, who until now have not consumed olive oil, are starting to do so.
Mechanization allows for the reduction of manual labour in its management and maintenance. Exploitation costs are considerably reduced as for example in harvesting which is placed at between .02 and.05 euros/kg of olives/ha, depending on the existing vegetable mass and the level of grip of the olive.
The increasing worldwide demand, along with low production in recent years has caused prices of oil to continually rise.
EVOLUTION OF THE AVERAGE PRICE OF THE ORIGIN OF OLIVE OIL IN SPAIN
Fuente: Fundación del Olivar y POOLred España