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Economics Gazette

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November 14, 2019

Greece does not use the potential of its agricultural products

agricultural productsGreece exported 50.3 tons of olive oil in the H1 2017, which worth 214.9 million EUR. This means that the country sells abroad a liter of olive oil for 4.20 EUR, while in local shops the cheapest olive oil is priced at about 8.00-8.50 EUR per liter. The main reason why Greek olive oil is exported at a lower price is that exports are mainly directed to Italy, where the olive oil is bottled and the Italian companies, respectively, add value and benefit from the Greek product.

This is just one of the examples that shows that Greece does not take advantage of the potential of their production. In recent years, the country has increased exports of raw materials rather than finished products, so the value of exports is declining.

That’s why not only the producers are responsible. The Greek economy as a whole records lost profits from exports, which is the result of a lack of investment in standards. Since the 1980s, there has been deindustrialization, which has forced the country to import finished goods and export raw materials.

Moreover, Greece is one of the world’s leading exporters of cotton and in the first half of 2017 the sales of raw materials abroad worth 147.4 million EUR. In 2016, the total value of exports of cotton was 325.36 million EUR, while imports of finished textiles were estimated at 659.8 million EUR.

However, some weak signs of change also appear. For example, in the fish industry, manufacturers have started to work on standards for their products and are ready to produce semi-processed fish products. However, it is difficult to calculate how much the country can earn from exports of finished goods.

According to various analyzes of international organizations, Greek exports may increase by up to 30%, or 16 billion EUR, if the necessary reforms are made and the country starts exporting raw materials but products with added value. Greece must also attract foreign investment into its economy and start modernizing existing businesses.

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