Pagina 1 di 24

Swot analysis of Apulia Region olive oil production

Indice

• Introduction ___________________________________________2

• Analysis of the Apulia olive oil sector_______________________________4 • Production and distribuction of the different firms in the regional district____6 • Structural Characteristics of the olive farms_________________________ 7 • Main producing fields ___________________________________________ 9 • Distribuction of oil production plants in the provinces__________________10 • The distribuction of the oliveassociations in the Apulian Provinces ______ 12 • The DOP acknowledgment and the DOP olive oil varieties in Apulia _____ 13 • The DOP oil business ________________________________________ 16 • Internationalization_____ _______________________________________18 • Propensity to foreign countries and import/export data________________ 19 • Evolution in the production and the export sales of olive oil ____________ 19 • Italian production forecast 2011/2012 _____________________________ 21

• National and International market situation in 2010/2011______________ 22 • The Spanish olive oil season 2010/2011 __________________________ 23 • Greek olive oil season 2010/2011 _______________________________ 24

Sources: ISTAT / ISMEA / ULISSE / INFOCAMERE / INFOIMPRESE COLDIRETTI / UNAPROL-CNO

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INTRODUCTION With its more than 600 thousand tons of national production average, the two thirds of wich are represented by extra virgin oil, and with its 42 acknowledgements (DOP) and an IGP, Italy is the second European olive oil producer. The olive oil production is a peculiarity of South of Italy. The annual production average reaches 600-700 thousand tons. Apulia, Calabria and Sicily, the most Southern Italian regens, affect the national production for more than 85%. Sardenia adds its 3% oliv oil production. Apulia anyway provides alone the overall national production with its 37%/40% production. Tuscany, Umbria and Latium provide the national production with 5.5%, whereas Liguria and Abruzzo provide the remaining 0.5%. These percentage results are based on ISTAT and ISMEA data and point out the special vocation of same regens for the olive cultivation and the olive oil production. Apulia reasonably clains to have the highest number of olive oil firms (267,203). Then come Sicily (196,352), Calabria (136,016) and Campania (112,093), Basilicata and Sardinia have a strongly inferior number of olive firms. 75% of the olive oil produced by Southern Italian regions is sold by measure in the collecting centres and is likely to be sold to the wholesalers or to the packers.

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9,50%6%

1,50% 1%

5,50% 6,50%

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30%

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Apulia Calabria Sicily Campania Sardinia Basilicata Toscania-Umbria-Lazio

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As ISMEA work based on ISTAT data show, the trade balance until October 2011 is positive for 34 million Euros, which is unusual enough for the Italian olive oil sector. So, the export works more then the import, as regards both the production volume and its worth. The sector of the extra virgin and of the virgin oil works very well. The orders have increased in the USA, where in the first ten months of 2011 have come to 104 thousand tons (+12%), for a corresponding a mount of 317 millions Euros (+10%). The demand for Italian oil is also positive in those countries, which are neither traditionally special consumers, nor customers. For instance, the export rates towards India are increasing for 25%, in correspondence with a +16% compensation, whereas in China a small inflection of the volumes has generated a 7% profits increase. As fare as nearer markets are concerned, Germany shows a 10% increase both in demands and in payments and a 16% increase in France. On a passive site, Italy shows a +28% impost rate from Greece and a +1% import rate from Spain. The trade balance in olive oil and olive pomace in the first 10 months of 2011 in Italy (compared with same period previous year) Import Export

tons var.% migliaia di € var.% tonne

llate var.% migliaia di € var.%

Extra virgin and virgin

384.672 5,4% 798.255 4,0% 230.465

12,6% 778.982 12,1%

Refined olive oil 22.890 -

20,2%

40.192 -24,3% 65.290 1,6% 178.245 -1,2%

Grade olive oil 67.872 15,0% 110.326 10,6% 5.299

-34,0

% 13.931 -27,6%

Total olive oil 475.433 5,0% 948.772 3,1% 301.054 8,7% 971.157 8,6%

Olive-pomace oil 11.226 30,4% 9.965 49,2% 196

-92,0

% 293 -86,0%

Refined olive-pomace

26.274 1,5% 27.168 5,9% 26.825 1,6% 48.350 4,7%

Total oil residue 37.500 8,7% 37.133 14,9% 27.021 -6,4% 48.643 0,7%

Total oil and olive pomace

512.933 5,3% 985.905 3,5% 328.075 7,3% 1.019.800 8,2%

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Analysis of the Apulia olive oil sector The production of Olive oil in Apulia shows as strong relation with the local olive cultivation conditions. Thanks to the wide diffusion of areas devoted to the agricultural cultivation, it represents one of the most interesting and strong sectors in the Apulia agro-food industry. With its annual production of about 250 thousand tons olive oil, 40% of which is extra virgin, Apulia affects the world olive oil production for 13%, representing the first producer all over the world. Moreover, a noticeable datum is given by the various localization and the related environmental factors and the productions techniques, which affect the performance of these areas. On the whole, two great areas of cultivation and production can be distinguished:

• The central and north part of the region (the whole province of Foggia and nearly the whole province of Bari);

• The provinces of Lecce, Brindisi and Taranto and some towns of the Southern part of the province of Bari, for some homogeneous production factors and for the characteristics.

All in all, more than 810 local units specially devoted to the production and transformation of food oil are active in Apulia at the moment.

2.508.0842.678.201

2.458.396

1.914.535

0

500.000

1.000.000

1.500.000

2.000.000

2.500.000

3.000.000

Number of tons of oil products in Apulia

2007 2008 2009 2010Production from 2007 to 2010

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Number of Factories in the Region of Apulia by province

Total number of factories Apulia Region: 577

234

131

8169 62

0

50

100

150

200

250

Bari Lecce Foggia Brindisi Taranto The provinces of Apulia Region

Number of companies

Pagina 6 di 24

PRODUCTION AND DISTRIBUTION OF THE DIFFERENT FIRMS IN THE REGIONAL DISTRICT Even though it has experienced an improvement in terms of modernization and rationalization of the transformation site, this industry still suffers some critic factors, due to the fragmentation and to the organizing and coordinating problems. The middle-sized Apulian transformation sites can transform to 10 tons olives a day. The process length of the first transformation phase is very different according to the two regional areas:

• In the Northern part of the province of Bari, the Southern part of the province of Foggia and the olive producing area of Gargano, where olives are directly picked from the olive trees, the process lasts about two months.

• In the Southern part of the province of Bari and in the Salento district, where olives are picked up from the ground, the work takes much longer and lasts a minimum of ¾ months to a maximum of 6/7 months, in the main production periods.

One of the characteristics of the olive oil industries in the Northern part of the province of Bari, is the fact that they also work by night, to transform the olives as rapidly as possible. The milling plants are mostly handled by private entrepreneurs or by the farmers themselves, and sometimes by cooperative societies. As far as private plants activities are concerned, the role of the industries is doubly divided. Firstly, the farmers have their olives milled by the olive presses, then they pick back the produced oil. A second function is a commercial one: the entrepreneurs are sold the olives by the farmers; then, they mill them, produce oil and sell it to the wholesalers. Whereas the commercial activity is carried on by 60% of the milling plants of the Northern part of the province of Bari, it is not so successful in the Southern towns. In this area, millers are more likely to transform the olives provided by the farmers who collect the final product at the end of the process. It will be either consumed by the families or directly sold by the farmers themselves. The oil produced in the Northern part of the province is better than the one produced in the Southern one. So, the tendency here is to keep it, waiting for a value increase in correspondence with an offer decrease. The oil so is directly sold to the bottling industries, with higher costs than the ones valid in the milling periods. A very negative element for the widening of the distribution sector is the entity of high costs for the creation of commercial networks. In the last years, a high number of social milling plants have born, thanks to the creation of cooperatives. The association and cooperative form are highly recommended by the local public actors, but these organizing structures have to face notable critic moments. One of the first difficulties to overcome, which is a cultural obstacle, is represented by a scarce solidarity among the olive oil producers. Only the larger milling industries have succeeded in facing the market problems, thanks to the fulfilment of some effective marketing projects. The most spread system of transformation used by the associated oil-mills is a continuous one; moreover, a part of the product, devoted to the trade, is directly picked by the partners. The quantity of the produced oil varies every year but the consume average of the Apulian presses has been about 164 tons last years, which is quite high. The main part of the production is represented by extra virgin oils, which can be directly consumed. In the Northern and central area, the extra virgin oils represent the main part, whereas in the Southern part of the province of Bari and in the Salento area, virgin and lamp oils prevail.

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All in all, the annual regional production average are more or less distributed this way: extra virgin oil: 40/45%; virgin oils: 30/35%; lamp oil : 25/30%. STRUCTURAL CHARACTERISTICS OF THE OLIVE FARMS 56.9% of the monitored industries has adopted a regular plantation configuration, whereas the other 43.1% show an irregular configuration. Analysing the distribution of the different types of plants in relation with the dimension of the farms, it can be noticed that the two forms are equally distributed in the enterprises with a smaller size than 2 hectares, whereas the regular type of plantation prevails in the larger units.

The sixth plant size class ( %) <2 ha 2-5 ha 5-10 ha 10-20 ha >20 ha Totale Irregular 49,4 38,9 33,1 28,3 33,7 43,1 Regular 50,6 61,1 66,9 71,7 66,3 56,9 Total 100,0 100,0 100,0 100,0 100,0 100,0 Source: UNAPROL-CNO The position of the enterprises influences the choice of the type of the plant nursery, as shown by the analysis both referred to the geographic distribution and the height factor. For instance, the regular distance among the plants prevails in the Apulian farms (for 66.2%), in Tuscany (68.8%) and, with littler extent, in Sicily (55.7%). An irregular trees distance configuration can be noticed in Calabria (65.8%), Campania (58.2%) and Liguria (56.2%). As far as the height is concerned, the regular configuration can be particularly noticed in the lowlands (66.3%) and in areas with less than 15% dip grade (52.2%). As far as the farms situated in terracing areas are concerned, an irregular configuration of plant nursery seem to prevail (75.6%). The vase-culture is clearly the most used one, as declared by 79.4% of the farms. Much lower is the rate of the free cultivation form (8.4%), and of other forms of cultivation (12.2% all in all). Relating these data to the dimension analysis, it can be noticed that the vase is the main cultivation instrument in all-sized farms, even though the bigger the farms, the higher the rate of vase usage. The free cultivation form is more used in smaller farms (9.7%) and in those with an extension 10 to 20 hectares (9.6%).

The training culture by size (%) <2 ha 2-5 ha 5-10 ha 10-20 ha >20 ha Totale Globo 4,6 5,1 3,7 2,3 4,0 4,5 Monocono 2,1 2,0 3,8 3,1 1,1 2,2 Vaso 77,6 80,7 81,3 82,0 84,3 79,4 Vaso cespugliato 6,1 5,4 4,0 3,1 4,4 5,5

freeform 9,7 6,7 7,2 9,6 6,2 8,4 Total 100,0 100,0 100,0 100,0 100,0 100,0 Source: UNAPROL-CNO

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Apulia and Basilicata are those regions, where the vase usage for the cultivation of olive trees nearly covers the totality of the cultivation instruments (96% in Apulia and 97.7% in Basilicata). Among other regions which consistently use it, it is necessary to highlight Campania (with 82.6%), Umbria (with 82.5%), Tuscany (79.6%) and Calabria (75.4%). Sicily and Liguria show a vase usage rate of 49.5% and of 47.6%. Regions like Liguria (37.8%), Sicily (25.4%) and Calabria (15.5%) also deserve a particular attention because of the high rate of percentage of usage of other forms of plant nursery, like the free one. Crossing the height position data with the forms of plant nursery ones, it appears that the vase is the main instrument, used in all morphologic positions: in the lowlands (86.1%), in the hills (74.3%)and on the mountains (69.7%). For its morphologic structure, the hill shows the highest percentage rate in all forms of plant nursery. It is followed by the lowland.

The training culture by altitude (%; Altitude =100) Collina Montagna Pianura Totale Globo 5,6 1,5 3,3 4,5 Monocono 2,3 3,0 2,1 2,2 Vaso 74,3 69,7 86,1 79,4 Vaso cespugliato 7,7 6,1 2,8 5,5

freeform 10,1 19,7 5,6 8,4 Total 100,0 100,0 100,0 100,0 Source: UNAPROL-CNO

The training culture by altitude (%; Type of cultivation =100) hill mountain plain Totale Globo 66,8 0,8 32,4 100,0 Monocono 55,6 3,4 41,0 100,0 Vaso 50,4 2,2 47,4 100,0 Vaso cespugliato 74,8 2,8 22,4 100,0

freeform 64,8 5,9 29,3 100,0 Total 53,8 2,5 43,7 100,0 Source: UNAPROL-CNO Little less than two thirds, so a wide majority of the farms taken into consideration, takes care of the areas through an ordinary activity. Other forms of care for the areas seem to have less importance and this is demonstrated by low percentage rates.

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MAIN PRODUCING FIELDS In the Apulian territory, there are many different olive varieties, some of which are unfortunately dying out. Among the local distinctive varieties, the following stand out:

• the Coratina olive, whose oil is yellow-green coloured, intensely fruit-tasting and slightly spicy;

• the Ogliarola quality, producing a yellow, coloured, round, soft and nearly sweet type of oil, particularly almond-tasting;

• the Garganica and Parenzana Ogliarola, which gives birth to green oil, with a fruited and balance taste;

• the Cellina and Saracena olives, whose product is yellow and slightly salty oil. The extra virgin oil represents about 70% of the regional oil production (so 44% at national level); on the other hand, the remaining 30% includes both virgin oil (12%) and lamp oil (18%). About 6% of the national area is cultivated through biologic production techniques (30% of the regional biologically treated areas).

% Surface divided by province

Bari; 36%

Lecce; 24%

Brindisi; 17%

Foggia; 13%

Taranto; 10%

Bari Lecce Brindisi Foggia Taranto

Pagina 10 di 24

DISTRIBUTION OF OIL PRODUCTION PLANTS IN THE PROVINCES The province of Bari shows the highest number of producing, milling and transformation local units, with 234 farms all in all. The main part of the milling plants devoted to the production of food oil is mostly concentrated in the Northern part of the province of Bari, in the Andria, Bitonto, Bisceglie, Canosa di Puglia and Corato country areas. But in the list of the main producing towns, also the South-East part appears, thanks to the contribution given by Monopoli.

CITY PROVINCE OF BARI NUMBER OF FACTORIES Acquaviva delle Fonti 3 Adelfia 3 Alberobello 3 Altamura 4 Andria 28 Bari 6 Barletta 5 Binetto 4 Bisceglie 11 Bitetto 5 Bitonto 16 Bitritto 2 Canosa di Puglia 11 Capurso 1 Casamassima 3 Cassano delle Murge 8 Castellana Grotte 5 Cellamare 2 Conversano 2 Corato 12 Gioia del Colle 1 Giovinazzo 1 Gravina in Puglia 5 Grumo Appula 2 Locorotondo 4 Minervino Murge 1 Modugno 2 Molfetta 8 Monopoli 14 Noci 4 Noicattaro 5 Palo del Colle 3 Putignano 4 Rutigliano 2 Ruvo di Puglia 5 Sammichele di Bari 2 Sannicandro di Bari 3 Santeramo in Colle 3 Spinazzola 2

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Terlizzi 5 Toritto 6 Trani 7 Triggiano 7 Turi 3 Valenzano 1 Even being the second province as for units of production, with 131 local units operating in 2003, the province of Lecce shows a more intense distributionof little units in the territory. It must be remembered that the area of the province of Lecce includes the highest number of towns in Apulia. The main part of the industries is settled in the city of Lecce, with 18 units, whereas the remaining quantity is equally distributed in the whole province, it is remarkable that only 24 of the 95 towns do not own producing or milling plants. This points out the small size of the farms however leading a notable production and characterized by a high-quality product. TABELLA That of Foggia is among the provinces most affected by the presence of plants devoted to the production of food oil. There are 81 farms homogenously distributed in the whole provincial district, with a high rate in the towns of cerignola, Torremaggiore and Trinitapoli. TABELLA The province of Brindisi is the fourth classified, as for the number of local units in the field of production of food oil, with 69 farms. Higher rates can be noticed in five towns (Ostuni, San Michele Salentino, Ceglie Messapica, Fasano and Villa Castelli), whereas the other units are equally distributed in the whole province. The province of Taranto is the province which shows the lowest rate of plants devoted to the production and trade of olive oil (just 58 units are registered). Also in this case the main concentration is limited to 4 towns, whereas the remaining units are nearly equally distributed in the whole province.

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THE DISTRIBUTION OF THE OLIVE ASSOCIATIONS IN THE APULIAN PROVINCES The field of the Apulian olive oil production is strongly and positively affected by the organizing and coordinating role played by the olive associations, which are present in all the provinces of the Apulian district. Here are the main Olive Associations operating in Apulia: LIST OF ASSOCIATIONS FOR PROVINCE Province of Bari • APOL - Manufacturers of Olives - Via Bottalico, No. 11 70124 - Bari - Tel +39.080-5471511 - Fax +39.080-5471599. • APPO - Provincial Association of Oil Producers - Via Devitofrancesco 2/n.17 - 70124 - Bari - Tel +39.080-5425802 - Fax +39.080-5474847. • APROLI - Manufacturer olive growers Association - Sorrentino Way, No 6 70126 - Bari Tel +39.080-5520386 - Fax +39.080-5520378 - www.aproli.it. • ASSOPROLI - olive oil producers association Bari - Via M. Master, 34 - 70121 Bari - Tel +39.080-5534041 - Fax +39.080-5559360. www.assoproli.it. • AVPPO - Provincial Association of Voluntary olive producers - Via Brigade Bari, 6 / a - 70100 BARI - Tel +39.080/5740422 - Fax +39.080/5740572. Province of Lecce • Association between producers APROL-Lecce Via M.Bernardini 11/13 - 73100 Lecce - Tel +39.0832-305595 - Fax +39.0832-309586. • MAP - Presidio Puglia olive growing internationalization of the Province of Lecce • ASO-Growers Association Salentine Piazza Mazzini, 56 - 73100 Lecce -303 054 0832 Tel - Fax +39.0832-309120 • COSEA - Services Consortium Company Viale Don urination 11 / a - 73100 Lecce Tel +39.0832-308230 - Fax +39.0832-247069 Province of Foggia • APO-NOC Provincial Association of Growers of Foggia Via Luigi Hoe, No. 25-71100 Foggia - Tel. / Fax +39.0881-776696 • APROL Foggia, Manufacturers Association of olive growers in the Province of Foggia - Via di San Giuliano, 4 - Village Craftsmen - 71100 Foggia. Province of Brindisi • ACLI - EARTH - Provincial Association between producers of olives and olive oil - Corso Umberto 122-72100 Brindisi - +39.0831 -568148 Tel. • AIPOP - Interprovincial Association Apulian olive producers 72015 Via Santa Margherita - Fasano (BR) - Fax +39.080-4425451. • APROL-Brindisi, olive growers Association - Independence Way 24-72100 Brindisi - Tel +39.0831-526590 - Fax +39.0831-560796 - www.aprolbrindisi.it • CSO-Salentino Growers Association - Via Mazzini, 71 - 72100 Brindisi - Tel +39.0831-563428 - Fax +39.0831-563428. Province of Taranto • AJO - Associazione Jonica Vittorio Emanuele III Olivicoltori Promenade, 26 - 74100

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Taranto - Tel +39.099-4520503 - Fax +39.099-4537203 • AJPROL - Associazione Jonica olive growers Via Duca degli Abruzzi 21-74100 Taranto - Tel +39.099-4537721 - Fax +39.099-4537721 • MAP - Presidio Puglia for Internationalization THE DOP ACKNOWLEDGMENT AND THE DOP OLIVE OIL VARIETIES IN APULIA The farms who produce DOP products must stick to the rigid rules expected in the production protocol. The observance of those rules is warranted by the specific check-body. To get this official acknowledgment has always meant a warranty of quality of the product, because the acknowledgment is given only after the leading of appropriate inspection procedures. In Apulia, there are five type local productions, which have got the DOP acknowledgment.

• DOP olive oil “Collina di Brindisi” The olive tree has been cultivated in the Brindisi area since the old times, as some age-old trees show in Fasano and Ostuni, where they are perfectly are perfectly grafted in the province environment. The most spread variety in the considered territory, generally known as “Ogliarola” or “Chiarita”, is so famous thanks to its strong fruitfulness and the high roughness. The “Collina di Brindisi” oil has a taste which offers a good combination with every food, either meat or fish, or vegetables and which is even appropriate with cakes. The oil must be kept fresh and dry, far from sources of heat, at a temperature 14° to 20° C. In this situation, the product is kept intact for more than 36 months. At lower temperatures, the oil can easily slip to freezing, so, before the consume, it is necessary to reproduce the right temperature (16° to 18° C) for some minutes and to shake it repeatedly, to let the product return to the natural liquid state. The extra virgin oil “Collina di Brindisi” is produced with the undamaged olives, mainly coming from the Ogliarola variety, which is directly picked from the trees. The transformation into the oil must be held within the next 48 hours after the picking, with a maximum oil yield of 25%. The ward ship organisms responsible for this oil variety are: Consorzio per la Tutela dell’olio extravergine di oliva – Ostuni (BR) CO.ASS.OL. – Consorzio Associazioni Olivicolo – Brindisi The check organism is represented by: Chamber of Commerce of Brindisi

• DOP olive oil “Dauno” The cultivation of the olive tree in the Province of Foggia certainly goes back to the Roman epoch. Indeed, “Daunia” is the ancient name to indicate the geographic area of the Province of Foggia. Later in the history, the oil trade became very intense, especially via the sea. In the Foggia area, 4 olive cultivation centres are particularly remarkable. They differ not only because of the geographic position, but also due to the quantity of varieties, cultivation techniques, development and modernizing capacities. These centres give birth to the different DOP oil nouns: Basso Tavoliere, Gargano, Alto Tavoliere and Subappennino.

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Whereas the Basso Tavoliere is particularly suitable for strong-taste dishes, such as stewed vegetables and roast-meat, the Gargano variety is the Dauno oil which best fits crude and particularly soft fish-based dishes, raw vegetables, to cook crustaceans and shellfish, or can be used as ingredient in soft sauces. The Alto Tavoliere variety combines with salads, bread or strong-taste dishes either raw or cooked. The last variety, the Subappennino one, is particularly good for valuable fried food and for cakes tasting. The oil must be kept fresh and dry, far from sources of heat, at a temperature 14° to 20° C. In this situation, the product is kept intact for more than 36 months. At lower temperatures, the oil can easily slip to freezing, so, before the consume, it is necessary to reproduce the right temperature (16° to 18° C) for some minutes and to shake it repeatedly, to let the product return to the natural liquid state. Every transformation stage is very accurate. The picking lasts very short. When olives are brought in the milling plants, the olives have already been selected and classified according to their quality and origin. Only wealthy fruit is milled, observing the expected terms and temperature. The stages of the process include: the washing, the leaves-stripping the choice, the milling, the kneading and separation. The oil is now ready to be consumed, so it is now protected through preservation in the darkness at the right temperatures and, at the end, it is bottled and packed. The ward ship organisms are: Consorzio Daunia Verde – Foggia APROL – Associazione Produttori Olivicoli – Villaggio Artigiani (FG) MAP – Presidio Puglia per l’Internazionalizzazione The control organism is: Chamber of Commerce of Foggia

• The DOP “Terra di bari” olive oil The olive tree is specifically growing in the Province of Bari, both because the area offers a particularly favourable environment and because the tree naturally and historically combines with the Bari landscape. So, it is specially linked to the cultural and trading tradition of the territory. As for the large size of the producing area, this is one of the most produced oil varieties The aromatic notes which enrich the “terra di bari” oil make it particularly suitable for grilled fish, salads, boiled vegetables, soups and, in genral, light dishes. The oil must be kept fresh and dry, far from sources of heat, at a temperature 14° to 20° C. In this situation, the product is kept intact for more than 36 months. At lower temperatures, the oil can easily slip to freezing, so, before the consume, it is necessary to reproduce the right temperature (16° to 18° C) for some minutes and to shake it repeatedly, to let the product return to the natural liquid state. The “Terra di Bari” olive oil is obtained from wealthy olives, which are picked within the end of January every year. In order to transform the olives into the oil, only mechanic and manual processes are allowed, processes aimed at keeping the original characteristics of the fruit: the picked olives are milled in cooperative private plants, furnished with continuous or traditional work-cycle machines. The ward ship organism of this DOP variety is: Consorzio di Tutela e Valorizzazione dell’olio extravergine di oliva DOP Terra di Bari Terrautentica – Bari As for the control organisms: Chamber of Commerce – Bari

Pagina 15 di 24

• The DOP olive oil “Terra d’Otranto” Until the nineteenth century, the Salento area, which goes from the Murge territory to the confluence between the Adriatic and the Ionic Seas, was called “Terra d’Otranto”; this name had been given to the district in the Middle Ages by the Basilian order. The olive nursery had been already introduced in the territory by the Phoenicious and the Greeks, but the first really prosperous oil market was activated by the Basilian monks. The aromatic notes characterizing the “Terra d’Otranto” oil variety make it specially good to season heavy dishes, such as grilled fish, salads, boiled vegetables, pasta. The oil must be kept fresh and dry, far from sources of heat, at a temperature 14° to 20° C. In this situation, the product is kept intact for more than 36 months. At lower temperatures, the oil can easily slip to freezing, so, before the consume, it is necessary to reproduce the right temperature (16° to 18° C) for some minutes and to shake it repeatedly, to let the product return to the natural liquid state. The extra virgin oil “Terra d’Otranto” is made out wealthy and integral olives, directly picked from the trees, either manually or through mechanic instruments. In order to transform the olives into the oil, only mechanic and manual processes are allowed, processes aimed at keeping the original characteristics of the fruit: the picked olives are milled in cooperative private plants, furnished with continuous or traditional work-cycle machines. The warding organism is: APROL – Associazione Produttori Olivicoli – Lecce The control organism s the Chamber of Commerce of Lecce.

• The DOP olive oil “Terre Tarentine” The extra virgin oil “Terre Tarentine” is got from the olive varieties “Leccino”, “Coratina”, “Ogliarola” and “Frantoio”, either singularly or mixed, with a percentage rate of not less than 80% in varying reciprocal proportions. The olive cultivation and transformation area includes the towns of Taranto, Ginosa, Laterza, Castellaneta, Palagianello, Palagiano, Mottola, Massafra, Crispiano, Statte, Martina Franca, Monteiasi and Montemesola. This type of high-quality production make busy about six thousand olive growers renders 9.5 thousand tons extra virgin oil every year. The control organism is represented by the Chamber of Commerce of Taranto.

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THE DOP OIL BUSINESS At the end of 2011, the DOP acknowledged firms have registered positive results. At least in terms of prize level, they have collected good responds in the market. Among the denominations, which have grown their quotations, the “Terre di Bari” one is certainly remarkable, with a growth of 21%, tuned in to the strong growth registered by the whole field in the province of Bari. Nevertheless, a special observation deserves the fact that the “Terre di Bari” variety is not so price-quoted, in comparison with the conventional oil in the same territory. Indeed, in the examined year, the price difference between the two products was only 3 cents/kg. This proves that sometimes the market does not reward the added value of the DOP varieties. Moving to another Apulian DOP, the “Dauno” one, it can be noticed that the price difference between the extra virgin oil and the conventional oil amounts to 16 cents/kg. Moreover, in 2011, this DOP has shown a yearly 13% increase. Also the DOP Calabria oil has registered some profit increase, with the highest rate registered by the Bruzio DOP (+15%). Sicily boasts a 9% increase of the Valli Trapanesi DOP and 35% increase of the Monti Iblei one. Moving towards Central and Northern Italy, the DOP quotations do not seem so positive as in the other parts of the state. Instead, only the Tuscany IGP shows a profit increase of 2% in comparison with a substantial stability registered by the Umbria DOP and the Sabina one. Small inflections can be noticed in Abruzzo and in the Northern regions, where, for instance, the Garda has decreased for 4%. THE GEOGRAPHIC DISTRIBUTION OF THE TYPICAL OLIVE CULTIVATION IN APULIAN PROVINCES

The geographical distribution of production typical of olives per province in Apulia • BARI

Bitonto, Monopoli, Palo del Colle Leucocarpa o Bianca. The whole territory Ogliarola salentina o Oliva Marina Tutto il Territorio Cellina di Nardò. The whole territory Corniola

• LECCE Alliste, Racale, Gallipoli Corniola

• FOGGIA Tutto il territorio Ogliarola Garganica, Nord Barese Oliva coratina , Litorale Barese, Ogliarola Barese o Paesana o Cima di Bitonto Litorale Orientale Adriatico Cima di Mola o Cima di Monopoli o Molese. The whole territory Signora Francesca

• BRINDISI Tutto il Territorio Chiarita o Leucocarpa Tutto il Territorio Coratina The whole territory ellina or Nardò Tutto il Territorio Ogliarola Crispiano, Massacra and Pulsano Leucocarpa Massacra, Castellaneta, Crispiano, Faggiano, Grottaglie Inchiostra

Pagina 17 di 24

• TARANTO

Crispiano, Massafra Tondina The whole Territory Cellina di Nardò The whole territory Ogliarola of Lecce or Salentina Nardò, Alliste Mennella or Mennadda Cerignola, Orta Nova Coratina. The whole Territory Rotondella or Tondina. San Severo Leucocarpa or Casellina

Pagina 18 di 24

INTERNATIONALIZATION The oil production field has many development opportunities, determined by the growth of demand coming from foreign markets. The relatively recent promotion of the typical “Mediterranean” nutritional model, whose main element is represented by the olive oil, can positively affect the market international expansion. Undoubtedly, a strong aid by the “made in Italy” image is required to warrant the export development of the Apulian enterprises. This aim can be reached through a constant effort to check and promote the product quality and through the development efficient communication policies. According to the tren of the trade in the first nine months of 2010/2011, the Apulian olive oil sector has fulfilled 8% of the export national quotations and 51.5% of the export rate coming from the whole South of Italy, equivalent to 62.2 million Euros. The province of Bari has developed, at the same time, the highest quotation of the commercial exchanges with foreign markets, follwed by the province of Brindisi. The other three provinces, Foggia, Lecce and Taranto, have relatively little affected the olive oil trade:

• The province of Bari has carried out 63.2% of the total regional export and 82.7% of the import;

• The province of Brindisi has fulfilled 31% of the export and 13.8% of the import of the region.

The oil export in Apulia is traditionally directed towards the European countries, but in the last years, the relationships with the USA and Japanese markets have also afforded discrete results, as shown by the list of the main foreign countries importing Apulia olive oil. Even though the recent demand of some of the nearest countries (such as Germany, Greece and France) has registered negative results, a relevant datum is represented by strong increase of the export towards Spain. Very flourishing also seem to be the USA and Australian markets, with a positive variation in comparison with the data registered in the same period, respectively of 4.92% and of 24.11%. The Italian olive oil sector must face an increase of the competitive pressures, mostly exerced by other European rivals, but also by the extra-European countries, on the other side of the South Mediterranean Sea. In 2010, these have benefited from the complete activation the free –trade area, a process that has further grown the competitive pressure on our producing system. Recently, some analyses have been proposed, Aimed at assessing the economic dynamics of the world olive oil trade, the competitiveness of the main producing countries on the world market and the assessment of the potential effect of the opening of the free-trade Euromediterranea area of the olive oil trade. This research focuses on the analysis of the exchanges of olive oil in the foreign market on a regional level. The research aim is, indeed, to evaluate the trend of the commercial flaws and the evolution of the Apulian competitive capacity in the last decade, in comparison with other Italian regions. The aim of the work is to understand the regional contribution to the national commercial performances in the foreign markets. The information used in the research are represented by the data collected and elaborated by the ISTAT Institute on the olive oil foreign trade.

Pagina 19 di 24

Propensity to foreign countries and import/export data The Apulian extra virgin olive oil has many opportunities to increase the export quote to the foreign countries. Very important ,in this increasing export process, is the role and the value given to the “mediterranean diet” where extra virgin olive oil is one of the primary element. Of course is also important a strong support in communication and advertising of the ” made in Italy” concept that is a guarantee of high quality products Extra virgin olive oil from Apulia is the 8% of the total national export quote and is the 51,5 % of the south Italy export quote for a total amount of 62,2 million of euro. Looking at the different producing area in Apulia , we can see that province of Bari has the 82,7 % of the total import quote, and 63,2% of the export quote and that province of Brindisi has the 13,8% of the import quote and 31% of the export quote Evolution in the production and the export sales of olive oil Italy buys olive oil mainly from 4 countries ( Spain, Greece, Tunisia and Syria) and sell the olive oil to almost 99 countries where the first eight are USA Germany, France, UK, Japan, Canada, Switzerland, and Spain) Looking at the last 12 years we can see that there is an increase even in the import quote (+65,9%) and in the export quote ( +116,3%) The export increase every year is 9,7% that is the double compared to the import increase per year that is 5,5%. This means that the Italian olive oil is more competitive in the foreign countries than the past. Apulia region produce 198.000 tons (32,6% of the national production) so is one of the most important production area but looking at the price of the Apulian production you can see that Apulia doesn’t have the capacity to evaluate the high quality olive oil that produces. The Apulian import/export data show that our region imports 70% of the extra virgin olive oil and export 55% and totally you can see that Apulia increase the import of + 92,7% and the export of 82,1% but including also the “lampante” and other oils products. Looking at the value of the Apulian olive oil production, following you can see the value(euro/kilo) of the virgin oil from 2006 to 2011

Prices at the origin of virgin olive oil bulk (euro / pound) 2006/2007 2007/2008 2008/2009 2009/2010 2010/2011 nov 2,65 2,54 2,25 2,13 1,94 dic 2,50 2,51 1,99 2,05 2,13 gen 2,45 2,57 1,92 2,08 2,12 feb 2,63 2,52 1,95 2,10 2,05 mar 2,73 2,53 1,86 2,04 2,08 apr 2,72 2,45 1,77 1,97 2,25 mag 2,57 2,37 1,70 1,96 2,19 giu 2,43 2,31 1,80 1,96 2,12 lug 2,41 2,38 1,97 1,91 2,11 ago 2,49 2,38 2,23 1,94 2,10

Pagina 20 di 24

set 2,58 2,38 2,38 1,96 2,00 ott 2,53 2,25 2,25 1,87 1,93 Mathematical mean 2,56 2,43 2,01 2,00 2,09

Franco factory making, free taxes Source : Ismea

Different situation is for the “lampante” production in Apulia, where the value prices went down around the 6% due also to the Spanish production in Europe. The value of euro 1,47 x kilo wasn’t so low since 2001.

The data shows that Italy was able to compete in the foreign markets with the high quality product (extra virgin) but with the lower qualities like lampante Italy is no more competitive abroad The reason is that ” lampante” is a product for to the refinery industry and the low italian performance in this sector confirm that the Italian industry in the olive oil sector is now seriously smaller and less competitive than the Spanish one Another important data is that Apulia region is less competitive than the other Italian regions .Infact the value of the tendency to export is only 17% ,compared to the other regions where is 60%.The reason of this numbers has to be related to the difficulties that the south of Italy food industry has to be organized and recognized abroad. In the next years the buying policies of the big foreign companies that control the main Italian brand in olive oil will influence the market and the data especially if Italy will not be able to apply the law concerning the labeling of the product. Infact this law of 2008 says that on the label must be written not only the country where the product is packed but also the country of origin of the olives. The importance of this law is confirmed by a published research that shows the 10% increase of the” made in Italy “ product consumption, where and when the consumer is well informed about the origin of the product.

Oil prices rise clear bulk (euro / pound) 2006/2007 2007/2008 2008/2009 2009/2010 2010/2011

nov 2,20 2,21 1,96 1,76 1,59 dic 2,02 2,19 1,78 1,76 1,59 gen 2,03 2,27 1,69 1,76 1,52 feb 2,25 2,24 1,72 1,69 1,53 mar 2,36 2,26 1,62 1,64 1,54 apr 2,35 2,20 1,54 1,55 1,53 mag 2,2 2,08 1,52 1,57 1,50 giu 2,09 2,07 1,62 1,53 1,48 lug 2,04 2,10 1,72 1,54 1,50 ago 2,05 2,11 1,99 1,57 1,50 set 2,13 2,10 2,15 1,60 1,47 ott 2,11 2,017 1,96 1,54 1,47 mathematical mean 2,15 2,15 1,77 1,63 1,52

Franco factory making, free taxes Source : Ismea

Pagina 21 di 24

Italian production forecast 2011/2012 Speaking about Apulia is necessary to make a difference different between north and the south of the region. The new olive oil season will show an increase of production in the north of Bari and a decrease in the Salento area. With this analysis , we can say that the total quantity that will be produced in the region will be a little bit higher( + 3%) than last year but the real increase will be in the high quality extra virgin olive oil. The high quality product should be produced by almost the 80% of our territory , starting from Foggia province and going down to Bari and south east of Bari province included a small part of Taranto province.

Italian production of oil pressure (tons) 2009 2010 2011 Var. % 2011/2010 Piemonte 14 13 13 0% Lombardia 973 999 1.051 5% Trentino Alto Adige 267 264 264 0%

Veneto 1.383 1.309 1.442 10% Friuli Venezia Giulia 43 34 30 -13%

Liguria 4.643 3.557 4.446 25% Emilia Romagna 1.169 785 827 5%

Toscana 19.134 18.449 11.070 -40% Umbria 9.100 10.340 7.238 -30% Marche 3.766 4.409 2.682 -39% Lazio 27.173 28.895 17.337 -40% Abruzzo 18.524 18.748 12.188 -35% Molise 6.423 6.249 5.452 -13% Campania 42.520 39.606 29.705 -25% Puglia 152.340 161.078 166.536 3% Basilicata 6.083 6.220 6.220 0% Calabria 172.169 157.918 161.845 2% Sicilia 45.467 48.467 51.214 6% Sardegna 6.479 6.066 3639,6 -40% Italia 517.670 513.407 483.200 -6% 2011: Estimate ISMEA in collaboration with the NOC and UNAPROL January 24, 2012. Source: ISTAT for 2009 and updated in 2010 to 30 January 2012

Pagina 22 di 24

National and International market situation in 2010/2011 Extra virgin olive oil market The last olive oil season (2010/2011) closed with a production medium price of euro 3,15 per kilo with a 23% of increase compared to the previous season. The real increase was in the first part of the season until July .

Prices rise in bulk olive oil (euro / pound) 2006/2007 2007/2008 2008/2009 2009/2010 2010/2011 nov 3,05 3,49 2,80 2,62 2,64 dic 2,77 3,25 2,47 2,43 2,88 gen 2,96 3,22 2,36 2,56 2,96 feb 3,04 3,11 2,37 2,57 2,94 mar 3,16 3,09 2,34 2,61 3,05 apr 3,17 3,02 2,29 2,60 3,54 mag 3,09 2,95 2,23 2,59 3,64 giu 3,02 2,89 2,31 2,59 3,53 lug 3,00 2,88 2,47 2,58 3,37 ago 3,05 2,87 2,73 2,56 3,26 set 3,28 2,84 2,92 2,56 3,10 ott 3,31 2,79 2,91 2,51 2,92 Mathematical mean 3,08 3,03 2,52 2,56 3,15

Franco factory making, free taxes Source : Ismea It is important to say that comparing our production and the Spanish production the price increase at the origin was happened only in Italy due to the new regulation about the “alchil esteri”. This difference between Spain and Italy can be evaluated as a premium to the high quality product . Olive oil season 2011/2012 (first four months)

The beginning of the new season shows a negative trend on the price value not based for sure on an high volume of production, that on the contrary is estimated less than 6% compared to the last season. Everybody knows that the olive oil market price is influenced by the Spanish production volume that this year will be very plentiful. Following, the value prices of the Italian production in the first 4 months of 2012where we can see that the Italian “lampante” is almost less than €1,50 x kilo .

Oil prices rise in pressure in the bulk Italian first 4 months of the campaign (euros / kg) Extravergine Vergine Lampante nov 08-feb 09 2,50 2,03 1,79 nov 09-feb 10 2,54 2,09 1,74 nov 10-feb 11 2,86 2,06 1,56 nov 11-feb 12 2,54 1,83 1,45 Var. 11/12 su 10/11 -11,3% -11,2% -7,1%

Franco factory making, free taxes Source : Ismea

Pagina 23 di 24

The Spanish olive oil season 2010/2011 As we said the last season in Spain was very bad for both extra virgin and lampante oils. For extra virgin we had a medium value prices less than €2,00 x kilo. This low prices situation is due to the high quantity of the production and to the well-known difficulties of the Spanish product in the relation between raw material and distribution.

2006/2007 2007/2008 2008/2009 2009/2010 2010/2011

nov 2,71 2,71 2,13 2,20 2,00 dic 2,61 2,70 2,07 2,04 2,05 gen 2,58 2,76 1,97 2,08 1,99 feb 2,67 2,62 1,95 2,08 1,98 mar 2,77 2,62 1,84 2,10 1,99 apr 2,69 2,44 1,77 2,13 1,99 mag 2,55 2,37 1,73 2,05 2,01 giu 2,45 2,35 1,86 2,02 2,01 lug 2,42 2,35 1,99 1,99 2,01 ago 2,45 2,35 2,30 1,96 1,92 set 2,40 2,32 2,49 1,96 1,9 ott 2,42 2,23 2,41 1,95 1,91 Mathematical mean 2,56 2,48 2,04 2,05 1,98

Also the “lampante “ oil season shows a medium value prices of € 1,69 x kilo that can be considered the worst performance in the last 10 years.

Oil prices rise striking Spanish bulk (euro / pound)

2006/2007 2007/2008 2008/2009 2009/2010 2010/2011

nov 2,49 2,51 2,03 2,04 1,77 dic 2,38 2,5 1,94 1,98 1,81 gen 2,38 2,52 1,85 1,96 1,71 feb 2,47 2,5 1,84 1,88 1,69 mar 2,59 2,5 1,7 1,78 1,69 apr 2,59 2,34 1,66 1,69 1,69 mag 2,42 2,26 1,59 1,66 1,67 giu 2,26 2,24 1,78 1,64 1,65 lug 2,24 2,27 1,9 1,64 1,65 ago 2,23 2,27 2,22 1,68 1,65 set 2,29 2,25 2,38 1,72 1,62 ott 2,34 2,18 2,28 1,69 1,66 Mathematical mean 2,39 2,36 1,93 1,78 1,69

Franco factory making, free taxes Source : Ismea

Pagina 24 di 24

Greek olive oil season 2010/2011 In Greece the last olive oil season was more similar to the Italian one and the medium value price was of € 2,29 x kilo with a 2% increase compared to the previous year. The demand of Greek olive oil came almost from Italy and other foreign countries.

Bulk prices origin of extra virgin greek (euro / pound) 2006/2007 2007/2008 2008/2009 2009/2010 2010/2011 nov 2,80 3,09 2,38 2,19 2,26 dic 2,68 3,01 2,19 2,13 2,24 gen 2,63 2,96 2,12 2,22 2,22 feb 2,69 2,80 2,06 2,31 2,22 mar 2,84 2,81 1,96 2,32 2,21 apr 2,81 2,71 1,85 2,30 2,33 mag 2,67 2,61 1,86 2,26 2,4 giu 2,57 2,63 2,02 2,24 2,37 lug 2,57 2,65 2,21 2,25 2,35 ago 2,73 2,60 2,43 2,25 2,35 set 2,91 2,56 2,49 2,27 2,31 ott 2,85 2,46 2,47 2,22 2,25 Mathematical mean 2,73 2,74 2,17 2,25 2,29

Franco factory making, free taxes Source : Ismea

Oil prices rise clear greek bulk (euro / pound)

2006/2007 2007/2008 2008/2009 2009/2010 2010/2011 nov 2,29 2,07 1,87 1,55 1,50 dic 2,15 2,12 1,81 1,55 1,50 gen 2,08 2,20 1,69 1,63 1,46 feb 2,16 2,19 1,64 1,66 1,46 mar 2,23 2,17 1,61 1,61 1,43 apr 2,23 2,15 1,54 1,53 1,46 mag 2,17 2,07 1,51 1,49 1,47 giu 2,07 2,04 1,56 1,45 1,45 lug 2,07 2,03 1,61 1,45 1,43 ago 2,10 2,03 1,73 1,45 1,43 set 2,12 2,01 1,77 1,51 1,42 ott 2,09 1,94 1,66 1,51 1,40 Mathematical mean 2,15 2,08 1,67 1,53 1,45

Franco factory making, free taxes Source : Ismea