Emerging Markets / February 24, 2017

Agricultural and Wine Markets in Portugal

Portugal is a mid-sized European country with a total territory of more than 92.000 square kilometers, which is slightly smaller than the state of Indiana. Portugal has a total population of almost 11 million citizens and is located along the Atlantic coast of Western Europe. Similarly, since 1986, Portugal has been a member of the European Union. With an annual gross domestic product (GDP) of approximately US$290 billion, Portugal is also a member of the Eurozone, whose official currency is the Euro. Currently, the Portuguese economy is divided into 3% agriculture, 22% manufacturing, and 75% services. However, the agriculture industry utilizes some 40% of the national territory, while another 38% is forested. Meanwhile, the Portuguese agricultural industry employs up to 9% of the national labor force, while manufacturing employs about 24% and services employ another 67%.

In terms of natural resources, Portugal’s geography is gifted with iron ore, copper, zinc, tin, tungsten, silver, gold, uranium, marble, clay, gypsum, salt, and hydropower. Likewise, within the manufacturing industry, Portugal produces textiles, clothing, footwear, wood products, cork, paper, chemicals, lubricants, ceramics, and glassware. Furthermore, within the agricultural industry, Portugal’s main products are grain, potatoes, tomatoes, olives, grapes, sheep, cattle, goats, pigs, poultry, dairy products, and fish. In terms of trade, Portugal’s most important partners are all fellow EU members, mainly those located throughout Western Europe. This article explores the status of the economy and agriculture in Portugal.

Agricultural and Wine Markets in Portugal

Faced with sluggish economic growth in recent years, the Portuguese economy suffers from high unemployment of approximately 10%, a percentage that is even higher amongst the youth. Nevertheless, Portugal remains a major producer of agricultural goods, particularly wine, one of the country’s leading high-quality exports. In 2015, Portugal reported almost 180.000 hectares of land devoted to wine grape production in 14 regions dispersed throughout the country, including the insular autonomous regions of Azores and Madeira. Portugal is the fifth largest wine producer within the EU, after France, Spain, Italy, and Germany, as well as a leading producer worldwide. Furthermore, wine is a key sector within the Portuguese agricultural industry, which means that it receives important subsidies and aids both at the national and EU level.

During 2016/17, the country is expected to produce some 5.6 million hectoliters of wine. This amount represents a slight decrease from previous years. For instance, between 2012 and 2015, Portugal produced above 6.2 million hectoliters of wine annually. Similarly, in 2012/13, the country imported more than 1.3 million hectoliters of wine, almost exclusively from fellow EU member states, particularly Spain. This amount then increased to an annual total of more than 2 million hectoliters worth of wine imports during 2013/14 and 2014/15 respectively.

In terms of exports, in recent years, Portugal has sold an annual average of 3 million hectoliters of wine into international markets. During 2014/15, Portugal sold some 1.5 million hectoliters of wine to fellow EU member states and exported another 1.4 million hectoliters to markets outside of the EU. Some of Portugal’s key markets outside of the EU are former colonial possessions, such as Brazil and Angola.

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