Growing olives in India

Boom? Bubble? Bust?

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Why grow olives in India?

The simple reason is that olives and olive oil are now fashionable. Italian food is popular around the world and is being consumed by the middle and wealth classes in India. While imports of olive oil are still small they are growing rapidly.

The increasing awareness of olive oil by consumers around the world has encouraged investors to plant olive groves in many countries outside the traditional production area of the Mediterranean. Like many new crops these investment booms mutate into bubbles where the market is sustained by unreal expectations rather than concrete sales of oil. Over time the bubble bursts and many investor lose their capital.

The time scale for the transition from boom to bust depends on the crop. Olives take a long time - five to ten years to come into production. This mean that the planting of olive trees can take place on a large scale without any production of olive oil at all. The boom is sustained by promotion - mainly by the people selling trees and irrigation equipment. When production of oil begins there is is a rapid rise in output which cannot be stopped as the trees have already been planted. Frequently the market is unable to cope and price collapse.

Olives are different from some of the other wonder crops such as jojoba and aloe vera that were promoted as an instant path to great wealth as there is a real and substantial market for olive oil but the prices remain stubbornly low for the producer. The top boutique oils fetch high prices but for the oil sold to the big brands the price is often as low as that for other vegetable oils. Olives are always going to be more difficult to harvest than sunflowers or other oil seed crops. The trees require pruning and all in all costs will be higher even with the maximum amount of mechanisation.

Is India heading down this track?

A short gallop through the olive oil story over the last half century

Olives and olive oil have had a checkered history over the last half century. Fifty years ago olive oil was strictly a Mediterranean food. It was the staple cooking oil of most Mediterranean countries on both the southern and northern shores. It was cheap and low grade oil was used for soap and other industrial products.

The north of Europe and predominantly Anglo-Saxon countries (at that time) such as USA, Canada, New Zealand and Australia did not consume olive oil. In fact they despised olive oil and complained about Italian food which they perceived as reeking of garlic and swimming in olive oil. Even the northern parts of Italy and Spain used a great deal of pig fat and butter in their cuisine.

India has always used vegetable cooking oils rather than animal fat with the exception of ghee (butter) but northern Europe, the USA etc. used to cook with animal fats such as lard (pigs) dripping (from roast beef, mutton or lamb) and suet (mainly beef). The 1950's saw the beginning of a cooking oil revolution. Over the next few decades animals fats in the diet declined rapidly (although they were so cheap that some came back into the diet through manufactured products such as margarine where they were hard to identify) and were replace by cheap vegetable oils made from rape, sunflowers, peanuts (ground nuts) etc. The olive oil industry was undermined by this cheap oil which even penetrated into its home turf of the Mediterranean. Olive oil could not compete. Olive trees were all hand harvested while oil seeds were mechanically harvested. The productivity of the olive trees remained the same while plant breeding constantly increase the yield of the oil seed crops. In spite of the poor returns from olives the World Bank and World Food Program funded the planting of millions of olive trees in North Africa and West Asia thus exacerbating the over production crisis.

Olive oil in the 1970s

During the 1970s olive oil gradually climbed out of its deep depression. The quality improved greatly with new processing equipment and Italian food was no longer despised but started to become fashionable. Probably the greatest boost for olive oil was the emerging health benefits and the famous "Mediterranean diet" that resulted in low levels of heart disease. In the USA, the fat wars became quite vicious with the margarine manufacturers branding butter as a poison. Gradually people became aware that margarine was only marginally better (in some cases worse) than butter from a health point of view and the oil that seemed to be genuinely healthy was olive oil.

Olive oil has a number of grades. The lowest grade is called Olive Oil - that is with capitals. This is the oil that has been treated with chemicals to reduce its acidity. It is fine for cooking but has very little flavour. Even this low grade oil now acquired a price margin over the oils from seed crops. It was generally double the price. Given the high cost of production for olive oil this was hardly a bonanza for olive growers.

The better Extravergine olive oil usually had a price advantage of three or four time the price of oils from seed crops (of course some boutique olive oils had a much high ratio than this) but at that time almost all the olive oil production was low grade Olive Oil not Extravergine olive oil.

The 1990s

On the consumption side the trend of the 1970s and 1980s continued but by now the exponential growth of the non-traditional markets was beginning to have some impact. They has started from a very low base (remember that Mediterranean food was despised) but by the end of the decade the USA had become the second largest importer of olive oil and even countries such as Ireland had increased their consumption by a stunning 1000% over ten years. While their consumption was still less than a small Italian region when added to the other countries in northern Europe, USA etc. olive oil changed from being almost exclusively a local product of the Mediterranean to a world traded commodity.

On the production side there was increased mechanisation of harvesting and increased plantings of olives in countries outside the Mediterranean region. Most of these had a Mediterranean climate and some experience of olives but the expansion was considerable. Large areas have been planted in Australia and Argentina. Some of the new areas were outside the Mediterranean climatic zone. New Zealand has planted olives in a more temperate environment and Australia has planted them in semitropical regions.

The new planting have not had a major impact on world production as olive trees are slow to come into production.

Prices to the growers have not been good. In particular the larger proportion of the crop that is extravergine olive oil has backfired and the price margin over the lower grades has shrunk to a substantial degree.

India in 2000's

India has now joined the wave of countries interested in olive production. Below are a couple of news report of the Indian experiments with olives. They seem to be concentrated in the state of Rajasthan and are full of hyperbole and exaggerated claims.

From The Times (London)

May 22, 2008

A million olive trees to make Indian desert bloom for farmers

Rhys Blackly in Bombay

The desert of Rajasthan in the north of India is to be planted with a million olive trees grown in Israel in an effort to transform the landscape and the fortunes of its struggling farmers.

The countries are finalising a three-year plan on agriculture that will introduce several crops associated with the Middle East and Mediterranean to India. It is hoped that the sub-continent — more famous today for its mangoes and spices — will become an exporter of olive oil by 2011.

Lior Weintrub, a spokesman for the Israeli Embassy in Delhi, said: “The symbolism is significant: an olive tree in the Middle East ... well, it means a lot.”

Diplomacy has also paved the way for dates and grapes from Israel to be grown in Maharashtra, a state in western India that has been blighted by tens of thousands of suicides among desperate smallholders in recent years.

Israeli technology companies will be drafted in to lend their expertise on matters such as water recycling and irrigation. In their home country, Israeli scientists have been credited with “greening” the Negev desert, performing what has been termed an agricultural miracle.

Indian olive oil is likely to find a ready market in the West as there is a global shortage of the product amid rising demand.

It is also hoped that the adoption of new crops and farming techniques can be a stepping stone towards a second green revolution in India — the first being the period in the 1960s and 1970s when the introduction of modern methods and new plant varieties radically boosted yields and eradicated famine.

Productivity growth in India's fields has since slowed to a crawl. In February the Government's official annual economic survey said that the farming sector, on which 70 per cent of the country's population depends for a living, was expected to grow 2.6 per cent this year, down from 3.8 per cent last year.

The report's authors gave warning of potentially dire consequences. “Due to uncertainties in global markets and hardening of international prices of food ... the food security of India critically depends on the farm sector,” they said.

Economists estimate that India's ability to increase harvests of staple foods such as grains, rice and pulses now runs at less than 1 per cent a year, lagging behind the 1.5 per cent population growth.

Dinker Panandikar, of the RPG Foundation, an economic think-tank, said: “It is touch and go whether India feeds itself.” Across India as many as 150,000 farmers have committed suicide in the past decade after falling behind in payments to money lenders, according to the Tata Institute of Social Sciences.

The Government took radical action this year when it waived £7.5 billion in debt owed by struggling farmers, as part of the annual budget.

Have your say:

As an olive grower in one of the world's premium olive oil regions I have to put a little realism into this discussion. An Italian NGO has been growing olives in Rajasthan for ten years with some limited success and to leap into a million trees makes good publicity but not much sense.
Brian Chatterton, Castel di Fiori, Italy

Are these Olive Trees from the stock that were stolen from the Palestinians when Israel 'Stole' land, property and Olive trees to make way for their resettlements, and Berlin Style Wall ?
If so, why wasn't it mentioned in the Press Report ?
Too Ashamed ?

B.W.Moore. Mr., Stockton on Tees, UK

Wonderful!! This puts me in mind of Revelation 6:6 where the Lamb opens the third seal and cautions "not to harm the oil or the wine". Apparently these are the two commodities that will
be spared during the drought and famine. Possibly because they do not need bees to pollinate. (they are dying)
Joni Baker, Kissimmee, Florida, USA

A million olive trees seems a lot and makes a good story but at a standard planting density of 250 trees per ha it amounts to only 4,000 ha - not an amount that would make any impact at all on world markets or even satisfy Indian demands. If they have been planted in 2008 and irrigated they will not produce significant yields by 2011 and I am sure there will not be an export surplus.

The greening of the Rajasthan desert - and all the other hype about deserts blooming depends on water. Rajasthan's water resources are already heavily committed for food crops and there is no obviously surplus for a huge new industry.

While The Times (from London) has a reputation for sensation and exaggeration the earlier report below from an Indian web site has a more considered discussion of the emerging olive industry.

India’s olive experiment take off in Rajasthan this week

27th March 2008

Can India become a major producer and exporter of olive oil?

50,000 sapling of various varieties will be planted near Jaipur to find the Variety most suitable to India.

By Siddhartha Sarma,

The agriculture board of a desert state, a micro-irrigation firm, and an Israeli company think so. Later this week, 50,000 olive saplings of various varieties will be planted near Jaipur in Rajasthan, part of a field test to check whether this belief translates into reality.

After all, olive trees do not grow in India.

If the Jaipur experiment succeeds, the variety most adaptable to Indian conditions will be selected in June. And one million olive saplings of this variety will be sold to farmers in areas around the city by Rajasthan Olive Cultivation Ltd, a company in which the three partners behind the effort— Rajasthan State Agriculture Board, Plastro Plasson of Pune and Indolive Ltd—have equal stakes.

Plastro Plasson Industries (India) Ltd is a joint venture between India and Israel in the area of micro-irrigation between Finolex Ltd of India and two Israeli companies, Plastro and Plasson. Indolive is an Israeli firm, partly funded by the government of that country, that promotes agricultural techniques.

“A project such as this, where a new kind of tree is being introduced in a water-scarce environment, hinges on the irrigation system used. So the olive project is as much about drip irrigation as it is about transforming Rajasthan into a major olive grower,” said Lior Weintraub, a spokesman for the Israel embassy here.

“The main reason the project was considered for Rajasthan was the similarities in climate and cultivation problems in the state and Israel. However, there are major differences in soil and other factors which will have to be addressed,” he added.

A general agreement to promote olive cultivation was signed by Israel and the Rajasthan government in November 2006. The two governments took a year to finalize the details of this initiative and a joint venture agreement was signed in November 2007.

“The results (of the field tests) will show which variety adapts itself best to Rajasthan’s climate and soil, after which more of the saplings will be brought. A total of 120,000 saplings will be placed at various nurseries in the first phase,” said Mika Harari of Indolive, a company which has successfully cultivated olives in southern Israel.

The trials will be carried out on 250 ha, said Rajasthan State Agriculture Marketing Board, or RSAMB. The plants will be irrigated by the very latest in drip irrigation techniques, the method of direct injection in which the roots are directly watered and nutrients added simultaneously.

“This saves 40% more water than older drip irrigation methods,” Weintraub said. He claimed that this method, called “drip-ferti” irrigation, was behind the production of 2.8 tonnes of olive oil per ha in Israel, a productivity rate that the project’s overseers hope to duplicate in Rajasthan.

Meanwhile, the Rajasthan government is seeking to woo farmers to try out olives.
“The farmers are being made aware of the market for olive oil, both domestic and export. The irrigation systems might be provided at a lower rate so that small farmers are also able to access it,” said RSAMB chairman Vipin Kumar Sharma.

Olive oil is a healthy alternative to other edible oils and the market for it around the world continues to grow. It is currently priced at around Rs800 per litre compared with groundnut oil, another popular cooking medium which is priced at Rs53-55 per litre. Around 3.2 million tonnes of olive oil is manufactured worldwide.

Again the report seems to treat the olive as a field crop not a tree crop. Trees planted in June 2008 need at least ten years to assess their suitability.

If the prices given at the end of the report are being used to judge the economic feasibility of olive oil the project is doomed to failure. The price of Rs 800 (about €15) per litre may be the cost of olive oil in boutiques in Delhi but is many times higher than that paid to the growers of some of the best oil in Tuscany and Umbria.

 Tax break likely for olive oil importers

Dilip Kumar Jha / Mumbai December 11, 2008, 0:48 IST (Business Standard)

MoF to clear confusion over customs duty soon.

The finance ministry will shortly issue a clarification, stating that olive oil imports will not attract any import duty. This follows summons issued by the Directorate of Revenue Intelligence (DRI) to several olive oil importers, asking them to pay an additional 37.5 per cent customs duty on all imports made since April this year.

Sources familiar with the developments said the customs department went through the issue and found that "extra-virgin" olive oil is categorised under 1509 of the harmonised system (HS) code, followed globally for standardisation. As per the notification by the ministry on April 1, goods imported under HS code 1509 are considered as crude and therefore, attract ‘nil’ duty.

However, due to a lack of clarity on the issue, DRI was charging 7.5 per cent customs duty, but recently asked the importers to pay the differential.

This created panic among importers of olive oil. In the Prevention of Food Adulteration Rules, 1995, the government has laid down the definition of olive oil as “the oil obtained from the fruit of the olive tree by mechanical or other physical means under conditions, particularly thermal which do not lead to adulteration of the oil.”

The rules also state virgin olive oil is suitable for consumption in the natural state without refining. It shall be clear, yellow to green in colour, with specific odour and taste, free odour or tastes indicating alteration or pollution of oil.

“There is a Supreme Court judgement in this regard, which we followed, and asked importers for differential duty and hence, there is no violation of notification in this regard,” said the signatory of the summons Atanu Choudhury, Senior Intelligence Officer of DRI without divulging details of the judgement

Meanwhile, trade sources are hopeful that with the inspection by the customs department, they will get a refund of the tax paid since April this year. “We will surely get a refund of 7.5 per cent duty that we have been paying on import of extra virgin olive oil since April, provided the government issues notification, sooner or later,” said V N Dalmia, president of Indian Olive Association.

India meets its 100 per cent demand through importers mainly from Europe. Confined largely to high-end consumers, olive oil is now gaining popularity among consumers because of its health benefits.

Global competition seems to be coming to India olive growers before they have produced their first batch of oil! The price of Rs 800 per litre seems more and more unrealistic.

Why grow olives in Rajasthan?

The reports explains that the promotion of olives in India on a large commercial scale is based on Israeli companies with government support. They see similarities between Israel and Rajasthan and have selected that state for their sale of trees. In fact the best quality oil from the Mediterranean comes from cooler regions. If the Italians were promoting olive oil they would probably have selected cooler regions in the foot hills of the Himalayas.

Is Rajasthan suitable for olives?

The immediate answer has to be no. Rajasthan has been a trading centre for centuries with Rajasthani merchants travelling and meeting other merchants from a wide range of countries. It can be assumed with considerable certainty that Rajasthani merchants visited Palestine and Syria over the last few millennium, that they tasted olive oil and that they bought back seeds. The fact that olives do not grow in Rajasthan is a strong indicator that they are not suitable.

Olives have been grown for a long time in the Mediterranean - many thousands of years probably. They have not been grown as long as chick peas but certainly long enough to spread across from their Mediterranean base to other suitable areas in Asia. Chick peas, that were first domesticated in Turkey and Syria, spread to India thousands of year ago and have become a staple part of the Indian diet. I am sure that olives would have spread in the same manner if they were well suited to the conditions in India.

Olives require some cold during winter to initiate flowering. Too much cold will frost the trees. Rajasthan should have sufficiently cold winters to meet the requirements of the olive without frost damage.

Olive trees flower in the spring and are pollinated by wind. Pollination is a critical period for the olive and only a small percentage of the flowers are fertilised and turn into fruit. Conditions in Rajasthan during flowering in spring are likely to be hot and windy These factors are not ideal for pollination.

In the Mediterranean most olives are grown under natural rainfall (as low as 250 to 300 mm in North Africa) and the soil is still moist in spring after winter rains. Rajasthan has a different rainfall pattern and it seems to be assumed that irrigation will be needed. Rajasthan does not have a surplus of irrigation water waiting to be utilised.

During the summer the olives withstand the hot dry conditions found in the Mediterranean. In Rajasthan the monsoon rains fall in summer when the olives are normally quite small. Experience in parts of Australia with a summer rainfall pattern has shown that the olives become quite large with the added rainfall and suitable for pickling as table olives but the oil percentage is too low to be profitable as an olive oil crop. Summer rain can also increase fungus attack. This in turn can be controlled with fungicides but that is another cost.

It may be possible to overcome many of these difficulties with modern technology but that adds to the cost of production.

Perhaps olives could be fitted into to the farming system as a fringe crop rather than utilising premium irrigation water? They are drought resistant and could be used a a sacrifice crop where the irrigation is turned off in a dry year. The crop would be low without irrigation but the trees would survive. Alternatively olives are more salt tolerant than most trees crops and could use slightly saline water perhaps even drainage water.

Introducing a new crop

I had considerable experience with new crops when I was Minister of Agriculture in South Australia. The one thing that is certain is that the people selling the plants will make money. The experience in Australia and New Zealand with the olive boom of the 1990s and early 2000s is that early entrants, as well as the tree nurseries, have also made money. They have been able to sell their olive oil at three or four times the world price based on its rarity value. Customers have been prepared to pay these prices for small bottles of Australian and New Zealand oil for patriotic or curiosity reasons.

I am sure the same will apply in India but how long will it last? In Australia and New Zealand that boom based on patriotism has faded as customers want larger quantities if oil and are not prepared to pay exorbitant prices.

The tree nurseries cannot fail. They will sell millions of trees as the olive bubble expands

The early entrants will sell their oil at high prices. Customers will buy it as souvenirs and probably never use it. Finally large scale production will come on stream and the industry will have to compete on world markets. That is a completely different story.

Introducing a new crop is like juggling with three balls in the air simultaneously.

Will the crop grow and produce reasonable yields?

One of the three balls is growing the crop. In the case of Rajasthan it is obviously not a natural olive growing region. Can these problems be overcome? Can irrigation compensate for the lack of rainfall in winter and spring? Will the summer rain cause low oil yields? Will fungus problems occur? Solutions will take time as olives produce little, even under irrigation, for five years.

What will it cost?

Cost is the second ball to juggle with. Technically it is possible to do almost anything but the cost can be very high. How does the use of irrigation water for olives compare with other crops? Is it better to adopt a partially irrigated system or use low grade slightly saline water?

Olives are labour intensive for picking and pruning and Rajasthan has plenty of cheap labour for these tasks. The labour does need to be trained especially for pruning. There is a tendency in the academic community and among the nomadic, consulting fraternity to discount these practical skills but they are often the key to success. Processing requires a high level of capital investment.

Of course the yield from the first series of trials will impact on the cost and a true indication of long term yield will take a decade or more to judge.

Marketing the oil.

Quality is the key to marketing - both the real and perceived quality. Again it will take years to assess.

In the report above, the price of groundnut oil was quoted at Rs53 to 55 per litre (about €1). I would suggest that Olive Oil - that is the lowest grade of olive oil - could be sold for Rs100 to 150 per (€2 to 3) litre - no more. (Prices in 2012 indicate that this is an optimistic level)

If the oil is Extravergine grade it will be sold at a very high price at first - possibly more than the Rs800 per litre quoted above. I can see it being sold in tiny 250 ml bottle at special tastings in the Taj Hotels at that price or more but remember this is not a real market and I am sure the Taj will not be buying it at this price for their own kitchens.

When substantial production comes on stream Indian olive oil will have to compete with oils from around the world and it will suffer from further disadvantages

While good technology can ensure the oil is Extravergine it may not be the best Extravergine commanding the top prices.

Firstly the autumn ripening period may be too hot for the optimum development of flavour.

Secondly the Israeli varieties (such as Barnea) are known for quantity not quality. Quality oil comes and is perceived to come from the central regions of Italy - Umbria, Tuscany and The Marche - and the classic olive varieties from these regions are thought of as quality varieties.

This brings me back to the first ball. As well as growing the tree and producing the oil one needs to determine the quality of the oil. It is better to produce a small amount and sell it at Rs500 a litre rather than a large crop that is sold at Rs150 a litre.

Some alternatives

As far as it is possible to discern the farming system being proposed seems to rely on imported trees from Israel. These will be protected with plant variety rights so even when daughter trees are grown in India they will pay a royalty to the owner of the rights.

They will be grown under irrigation using the most modern technology in large plantations.

The development will be funded by outside investors and I cannot see it having any impact on the incomes of struggling local farmers.

If India is serious about growing olives it should take the initiative rather than rely on outside promoters. There may be more suitable climatic areas than the deserts of Rajasthan.

In Rajasthan if olives do grow other farming systems should be explored.

Olives may be profitable on surplus irrigation water or low quality water unsuitable for other trees crops.

Olives grow without irrigation in the Mediterranean. In Tunisia they are grown in areas with as little as 250 to 300 mm but this is winter rain and more effective than the summer monsoon in Rajasthan because evaporation is lower. Trails should be conducted with olives without irrigation.

Olives are also grown on hillsides throughout the Mediterranean and while this is now a considerable disadvantage because it makes mechanical picking difficult or impossible that would not be a problem in Rajasthan. Instead of seeing olives as a substitute for field crops on irrigated land they could be grown in hill country using smaller local catchments.

A story that never goes away

The story of the olives in India seems to be a perfect filler. It goes on and on being repeated without any reference to earlier stories. What irritates me is the constant reference to "lucrative," profitable" and other such terms. The production of olive oil continues to be a disaster for growers around the world. While India has lower labour costs I doubt whether this will be sufficient to compensate for the lower price of oil. My prediction is a pattern similar to New Zealand and Australia where early adopters make good profits from selling plants to others and their oil which commanded a premium for a short period because of its rarity. As soon as substantial production comes on stream the price drops dramatically.

Now, olive oil made in Gujarat

Nayan Dave, May 17, 2011, 04.47am IST AHMEDABAD:

Just as the grapes of Nashik have redefined the wine industry in India, olives being grown in a nursery in north Gujarat could do the same for the edible oil industry. The Gujarat government believes these little green bulbs have the potential to change the fortunes of farmers, given the growing demand for the healthier oil. It has funded a pilot project to grow olive trees in the state. Sardarkrushinagar Dantiwada Agricultural University (SDAU) has tied up with Israeli company Asia Everest Limited (AEL) for the project. This is the first attempt to grow olives in the country on a large-scale. At present, the entire demand for all olive products is met by Mediterranean countries.

Times of India

I am puzzled about "the little green bulbs" but even more about "changing the fortunes of farmers." I assume they mean for the better but the evidence does not support this.

While a debate swirls around how to ensure the quality of extra virgin olive oil in the United States, Europe and elsewhere, consumers in India are getting an entirely different message.

In a new campaign rolled out by the country’s largest olive oil marketer, it’s the lowest edible grade — one that can’t even legally be called “olive oil” in most places — that Indians should turn to for a healthier diet: Introducing the only major campaign in the world to promote olive pomace oil.

It’s all under the direction of VN Dalmia, 57, son of pioneer industrialist Ramkrishna Dalmia, and the chairman of Dalmia Continental, the company behind Leonardo Olive Oil.
He is the president of the Indian Olive Association, a former president of the Indo-American Chamber of Commerce, a trustee at the Darden School of Business at the University of Virginia, and a Knight Commander of Italy for his contribution to the development of friendly relations. “I am conscious of my responsibilities and weigh my words carefully as I speak,” he told Olive Oil Times.
Dalmia has been criticised for choosing to concentrate marketing efforts on the lowest oil grade but he says his critics have it all wrong. “Criticism is misconceived and displays a lack of understanding of the realities of the Indian marketplace,” he said.
“We have various companies, associations, consortia and even the IOC trying to introduce new ‘Mediterranean’ and other diets, new tastes, etc. and concurrently telling us that (extra virgin) tastes ‘better.’ This is akin to taking coconut oil to Italy or Spain and telling them that their food would taste better if cooked in coconut oil or, for that matter, mustard oil to France and proposing the same to them! Good marketing consists of determining and giving the customer what she wants and needs rather than trying to shove your product down her throat and tell her what is better for her.”
After pressing olives into oil, what’s left is the residue called pomace: the solid remains of the olive including skins, pulp, seeds, and stems. There is such a little amount of oil left in the pomace that it cannot be extracted by pressing, but only through industrial refining including the use of chemical solvents (like hexane), extremely high heat and deodorization.
Olive pomace oil is used by institutional food services, restaurants and pizzerias. It is often picked up by unwitting shoppers swayed by the romantic packaging with its misleading wording and low price — unaware that they’re not actually buying olive oil at all.
It’s the olive pomace grade that Dalmia emphasises in a new mass-market campaign in India under the slogan “Go Indiano.”
“We decided to focus on Indian cuisine and daily use because that is where the volume would come from. We introduced Leonardo Olive Pomace Oil because of the way Indian food is prepared,” Dalmia said. “Everyday Indian food involves high-heat cooking. Extra virgin olive oil presented problems with frying: it was unstable at high temperatures and it imparted an olive flavour to the food and thus changed the taste. As a result, people who tried it concluded that olive oil was unsuitable for Indian cooking and abandoned it. Olive pomace oil presented none of these problems.”
Abandoned is right. In a 2008 interview, Dalmia predicted consumption of olive oil in India would reach 25,000 tons in 2010, and 42,000 tons in 2012 — forecasts that turned out to be way off. Last year the total was 4,000 tons, this year it might be 6,000 — incredibly small numbers for 1.2 billion people. It would equal about 1/4 of a tablespoon per year for the average Indian, or about one-ten-thousandth of what the typical Greek consumes — or less than one-hundredth of the average American.
Jean-Louis Barjol, the executive director of the International Olive Council has called the results in India a “disappointment,” and has since put the IOC’s limited promotional dollars to work elsewhere.

Meanwhile, Dalmia Continental has announced a plan to spend Rs. 60 crores ($13 million) on getting the word out, and it is inviting investors to come along for the ride. “We have several offers for participation in our growth equity and are evaluating the proposals. We shall make announcements shortly,” VN Dalmia said.

Dalmia’s $13 million campaign dwarfs the $1.7 million the International Olive Council hopes will have an impact in the world’s biggest market. And the differences just get more stark from there.

The IOC’s North American olive oil promotional campaign was launched at a small Lincoln Center photo op that coincided with New York’s Mercedes Benz Fashion Week, featuring EVOO cocktails and an aspirational message that likened olive oil to the “little black dress.”

While in India, the campaign is aimed at getting people to move up from unhealthy seed oils by explaining that olive oil doesn’t have to be expensive: By using olive pomace oil and “reusing it up to three times,” olive oil’s famous health benefits can be obtained affordably and without altering the taste of traditional India dishes, the pitch goes.

“We should not waste time and energy in criticizing different grades of olive oil or each other,” Dalmia suggested. “ Olive oil purists, in their zeal to promote the benefits and taste of extra virgin, miss the point, he said. “Internecine squabbling will not serve to grow the world market.”

Olive Oil Times contributing writer Vikas Vij acknowledged the different market segments and what drives their decisions: “Health is the primary concern of urban Indians, and they will need a scientific assurance that olive pomace oil is at least ‘not worse’ than their existing cooking oils in terms of health,” Vij said from Delhi adding, “however, rural and less affluent Indians may opt for olive pomace oil due to economic compulsions if it is effectively cheaper than other cooking oils.”

Nidhi Jhingan, a 39-year-old professional and married mother of two children in Delhi wonders if the approach employed by Dalmia and others might prove to be shortsighted: “Olive pomace oil may initially sell due to consumer confusion about the difference between pomace oils and higher grades. That is not a sustainable strategy in the long-term. It is better to present scientific facts and comparisons with other traditional Indian cooking oils, and let the consumer make an informed choice. Consumer education about extra virgin and pomace oils is critical for any responsible Indian olive oil producer as well as the government. “

Of course with big risks come big rewards. “We agree that olive oil consumption in this giant country is minuscule but are encouraged by the potential,” Dalmia said, but he admitted he’s not alone: “This notion that a quick buck can be made by importing a container of olive oil has been the sure road to ruin for many and creates havoc in the market. However, a slow process of consolidation is taking place, a few brands are gaining prominence and I expect that many brands will fall by the way-side in the next 2 years.”

Meanwhile, India is a mess when it comes to health and VN Dalmia thinks olive pomace oil is one product that can reverse the deadly trend: ”India ranks as World No.1 in cardiac patients. More than 100 million people in India suffer from heart disease. 31 percent of urban Indians are either overweight or obese. 140 million people in India have high blood pressure,” Dalmia said. “Over 40 percent of urban Indians have high lipid levels. India is the diabetic capital of world with an estimated 51 million people affected. The situation is already a national emergency. We need a healthy oil. Olive oil, including olive pomace oil, is the world’s healthiest edible oil.”

Shock! Horror! Of course you would expect me to have that reaction but there is a great deal of sense in what Dalmia is saying but he is going much too far.

I was borne in India and I am passionate about India food. We eat as much if not more Indian food at home than we eat Italian. Of course it is a waste to use Extravergine Olive Oil to cook Indian food. My experience is just that. It is a waste. The flavours of the India food are so strong they completely drown out the flavour of the oil. Where I disagree completely with Dalmia is that having made this valid point he jumps to the other end of the scale. Effectively there are three technical grades of olive oil Extravergine which is the top grade untouched by chemicals. There is the Vergine grade that is so rarely seen that I have called it the ghost grade. The next one down the ladder of quality is Olive Oil that is with capitals. This is treated with chemicals to reduce the acidity. Chemical treatment also removes the flavour. Some flavour it added by blending in some Vergine or Extravergine oil but essentially it is bland oil. Given the scale of Dalmia's operations he could buy Olive Oil that is even blander than normal at an even lower price. This seems to me to be the ideal oil for cooking India food.

Dalmia goes further than this and is promoting Sansa or Pomace Olive Oil. This is quite a few steps down from Olive Oil on the quality scale. It is not extracted by pressure but by the use of solvents. The oil that is extracted is then treated with more chemicals to counter all its numerous defects. Unfortunately the olive oil peak body is controlled by the big multinational food companies who all have a stake in olive oil marketing. They have no loyalty to olive oil or the growers' reputation and are happy to produce whatever they can make a profit from. If olive growers and small oil mills had their way they would see the sansa or pomace oils banned. Of course Dalmia makes a plea on the grounds of cost but given that Olive Oil is so cheap (see olive oil) I wonder whether the Sansa Oil is really going to make such a difference. It is not the poor in India who suffer from obesity and its associated health problems but the rapidly rising middle class. I am quite sure they can afford Olive Oil rather than Sansa Oil.

I also wonder whether the marketing of Sansa or Pomace oil is not dependent on ignorance of these words. There is no direct English equivalent but it could be labeled more truthfully as Oil from Olive mill waste. Of course it will not be because that would seriously reduce sales.

Where Dalmia is just plain wrong is his claim that Sansa Oil is more stable than Extravergine when it is used for high temperature frying. There is a great deal of misunderstanding about this. Extravergine olive oil should not be used for high temperature frying because the flavour is unstable and is evaporated off. The oil is stable. It is the same oil as the Sansa Oil after all. The chemical extraction from the residue does not extract another type of oil. The difference is Extravergine is olive oil plus flavour while Sansa Oil is olive oil minus flavour plus chemicals.

Readers wishing to understand more about olive oil will be interested in my books which are available on the Amazon Kindle including now a Amazon site for India;

Inside the olive oil jar is an account of olive oil quality and health benefits

Growing olives for quality oil is a comprehensive manual for the small olive grower.

More information on both these books is available on the Pulcini Press web site.


Since writing this article I conducted an olive oil tasting in New Delhi in January 2012 and from this total unrepresentative sample of Indian consumers concluded that they have not yet been corrupted by the big brand bottlers into believing that olive oil is as bland as other vegetable oils. The reaction by Indian consumers to our own strongly flavoured oil from the mountain region of Umbria was extremely positive.

Mr. V. N. Dalmia who has promoted Pomace oil in India (picture below) has made some controversial claims about Pomace (Sansa) Oil. The claims have been refuted by the Indian Advertising Standards Authority and the Executive Editor of the Olive OIl Times. The complete article can be read on their site or HERE.

V.N. Dalmia

The promotion of olives in India never stops. In a recent article on olives in Rajasthan on the DNA India web site (05-09-13) the exaggerations continued unabated. Probably the most extreme claim is the building of a frantoio to crush the olives with a capacity of 500 tonnes of oil an hour (more than 2500 tonnes of olives an hours). Currently India imports 11,000 tonnes of olive oil a year so local demand will be satisfied in 22 hours. Assuming that the author has simply got his naughts muddled the whole approach is misguided as it assumes that producing olives is the only issue. Will they be a profitable crop given that presently the Indian market is based on the lowest grades of oil at the cheapest prices. While the Mediterranean may be a higher cost region than Rajasthan there is always some poor quality oil that traders want to get rid of at rock bottom prices because it is unsaleable elsewhere. Can local Indian production compete?

Rajasthan does not have a great surplus of water. How do olives compete with other crops? This does not seem to be considered. Perhaps it is too early to say in which case authors should be more cautious.

The whole story reminds me of the new crop promotions in Australia. The was the wonder product Jojhoba and then there was Aloe vera. In both cases they were promoted as great bonazas for the producers but they turned out to be great banazas for the people who produced the plants for the next stage. The people who produced the product found of course that the market was over supplied for these niche products and the price collapsed. Olice oil is different as the market is established and India output is unlikely to affect prices but those prices are already very low.

December 2013

I understand that Mr Dalmia is planning to sell a blend of olive oil and rice bran oil (70:30) because the fall in the India rupee has made even the lowest grades of olive oil too expensive. In principle I see nothing wrong with this provided the blend is truthfully labeled - and truthfully means in big letters on the front not the fine print on the back. It has been an area of controversy among growers for many years. many people see it as rice bran oil exploiting the image of olive oil - and therefore should be resisted at all costs but I think that is extreme. In Australia for years the Wool Board resisted any wool blends but utimately that had to give in as wool-synthetic blends were ofter the most practical fabric.

At the other end of the world the Spanish have developed a butter made completely from olive oil. There have for some time been blends of margarine and olive oil that have exploited the olive oil image quite ruthlessly. They have given the strong impression on the front they are made from olive oil but on the back the fine print tells a quite different story. The olive oil butter seems to be in the same category. They have made the spread which is not difficult but in addition they have added butter flavour. This is another example of the food scientists being too clever for our good. It is part of a story that includes synthetic meat and and many other products. If you do not think you can eat meat or butter change your diet. Why pretend?

January 2014

The Olive Oil Times has reported that Taiwan has rejected imports of Pomace or sansa oil. The decision is based on additives not the oil itself unfortunately. It is a good example of greed on the part of the exporters. Not only are they selling this pomace oil using the image of olive oil but they are pretending it is fresh by adding a colouring - copper chlorophyllin. The genuine green colour for olive oil is elusive. The olives need to be picked early. Some varieties produce more colour and the oil needs to be fresh. None of these criteria apply to pomace oil. Adding the colour is an easier way to fool the customer.

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