Sicily, oil exports too dependent on the USA

A system that is still too fragmented and too unbalanced in its export towards the United States, which absorbed half of Sicilian oil exports last year. With the other (few) markets mostly European: the main non-European destinations weigh less than 7% of Sicilian exports. And one can therefore understand the reason for the fears over Trump's duties and the difficult geopolitical situation. Export is just one of the (now critical) aspects of the Sicilian oil sector, which has grown a lot in recent years but needs structural interventions to make it more solid.

Issues discussed in depth in Palermo as part of the forum dedicated to the olive oil sector and organised by UniCredit and Confagricoltura Sicilia. The starting point for all the reasoning is the Prometeia study that provides some firm points whether you want to see the glass half-full (the sector has grown a lot in the last ten years) or half-empty (progress is needed on several fronts). And credit plays no small role. "We are committed to supporting the entire oil supply chain in Sicily, which is facing major challenges in terms of dimensional growth and competitiveness on national and international markets,' says Salvatore Malandrino, Regional Manager of Sicily at UniCredit. 'We support businesses in the sector with a service model that provides for the presence of Agribusiness managers and specialists located throughout the region and with an offer of products and services tailored to their specific needs. In Sicily, moreover, we have already signed four supply chain agreements dedicated to the world of oil in order to facilitate access to credit for member companies'.

The picture, represented by Prometeia, is this: Sicily is one of the main Italian regions (third after Calabria and Puglia), with over 280 thousand tonnes of olives for oil harvested and an oil production of over 34 thousand tonnes (11.4% and 8.8% of the national figure respectively, third behind Puglia and Calabria), with a potential for the over 150 thousand hectares destined for this crop (14% of the national land) that seems not yet fully expressed. "A clear picture emerges of the situation of olive oil production in Sicily, historically characterised by an extraordinary capacity to produce oil of excellence, threatened and limited, however, on the one hand by drought and adverse weather conditions, and on the other by competition from other Mediterranean countries,' explains Rosario Marchese Ragona, President of Confagricoltura Sicilia. 'Sicily continues to be the third region in Italy for olive oil production, but we need to work to develop the still unexpressed potential and manage the risks in the best possible way. In the industrial processing sector in Sicily there are 433 companies with a total turnover of 360 million and 1129 employees: Palermo and Trapani are the leading provinces in terms of oil production and average size; five companies account for about one third of the regional turnover; no single company (net of those belonging to industrial groups) exceeds 50 million in turnover (there are three in Apulia and five in Tuscany).

Reduced size afflicts much of the Sicilian agrifood sector, and olive-growing does not escape the rule: the 97 thousand holdings with olive trees have an average size of 1.3 hectares, lower than the national average (1.6 ha, -17%) and much lower than two benchmark regions (Puglia and Tuscany, over -35%). A gap that is only partly reduced in the territories with a high olive-growing vocation, with average surfaces rising to 1.8 hectares, but still lower than the other regions and the Italian figure. "The small size and low specialisation determine economic-financial and management difficulties that may compromise the future of the sector," explains Andrea Dossena, senior specialist at Prometeia. The predominantly family-run nature of the companies makes the issue of generational turnover in agriculture very pressing. The reduced size not only has implications on ownership structures and organisational aspects, but also impacts on the financial resources needed to make investments'.