Argan oil can cost as much as $300 per liter. Why is it so expensive? - Business Insider - Business Insider

• In just one generation, the international market for argan oil has risen from 200 liters to 4,000 metric tons.

• This artisanal oil was originally sold on the roadside in recycled bottles for as little as $3 per liter.

• It takes one woman approximately 24 hours to produce one liter of argan oil.

• Visit Business Insider's homepage for more stories.

Below is a transcript of the video:

Argan oil can cost as much as $300 per liter, making it the world's most expensive edible oil. Just 20 years ago, however, the production of argan oil was isolated to local villages in Morocco, with international sales virtually nonexistent. But since then, the formation of women-run cooperatives has transformed the production into a billion-dollar industry.

So, why has argan oil suddenly gained such popularity? And what makes it so expensive?

Argan oil is predominantly used in high-end cosmetic products and Moroccan cuisine. The oil comes from the seed of the argan tree, native only to the narrow strip of semi-desert between Morocco's Atlantic coast and the Atlas Mountains. The Amazigh people of North Africa have been using the argan seeds for centuries, and the methods for creating this costly oil haven't changed in years.

Khadija Heeda: The first stage of production is the collection. We collect the fruits of the argan. We collect them when they are mature. The young fruit is this color, green. We can't collect it by striking the tree with sticks or picking it from the tree. We wait for it to mature and drop to the ground, and its color turns to brown.

Narrator: Once collected, the argan fruits are sun-dried before being peeled and de-pulped by hand to remove the fleshy outer layers. The leftover argan nut then needs to be cracked to retrieve the oil-rich kernel inside.

Khadija Heeda: This is a difficult stage. Not just anybody can crack this nut, because you need to know the technique to crack it correctly to maintain the structure of the nut and not grind it. To obtain a liter of argan oil, we need 40 kilograms of the fruit, or about 20 kilograms of the nuts, to obtain one liter.

Narrator: The next stage is grinding, which is often also done by hand.

Khadija Heeda: We grind the argan kernels in this traditional method that we learned from our ancestors and that is known in our Moroccan heritage. This is a time-consuming method. To obtain one liter, this method takes two hours. That is why we developed, and now we are able, when we have a large order, to use the machine. The machine — it takes little time. In five minutes, it can produce one or two liters.

Argan oil is not like other oils. The best quality is known as "red gold" because it is very expensive. Argan oil requires a lot of effort to produce. For one woman to produce one liter of argan oil, it would take her approximately 24 hours.

Narrator: The leftover pulp removed from the fruit is sold as animal feed, particularly for goats, who are intrinsically linked to the argan tree. In some areas, it's tradition to allow goats to climb the trees to freely feed on the fruits. Argan kernels are then collected from their excrement, saving the laborious work of cracking open the nuts manually. But nowadays, in most argan forestries, this peculiar sight is mainly used as a tourist attraction.

Khadija Heeda: When oil produced that way was studied, it was found to be unfit for consumption. If the goat has any problem, it becomes harmful. Goats are a part of this region — tourists enjoy seeing the goats in the argan trees, and they like to take pictures with them.

Narrator: Traditionally, Amazigh women, who until 1956 required the man's permission to leave their homes, made argan oil primarily for culinary purposes using methods passed down through generations. This artisanal oil was occasionally sold on the roadside in recycled bottles for as little as $3 per liter.

Zoubida Charrouf: We found out that the women who prepared this oil in a traditional way had very soft skin and no wrinkles at all. But we had no scientific proof.

Narrator: Zoubida Charrouf first studied the argan tree for her PhD in the late 1980s, when the species was in dangerous decline. After conducting scientific research to support the moisturizing benefits of argan oil on hair and skin, Charrouf planned to transform the environmental problem into an economic solution.

Zoubida Charrouf: The objective was not to keep these results in the drawers at the university, but to go out into the field and organize the sector. These women were not organized at all, who produced argan oil in the traditional way at home. It was very difficult. It was something new. They didn't know what a cooperative was. Then, they never left their homes. But we started with 16 women, and as soon as the others saw how this first cooperative turned out, a lot of women came to see us who also wanted to organize themselves into cooperatives and benefit from the marketing of Argan oil.

Narrator: Sure enough, the rapid rise in popularity of argan oil not only brought profit to the region, but also revitalized an entire ecosystem. The newfound respect for the value of argan trees ensured stability for the species, and in turn, the surrounding wildlife and community reaped the benefits. The argan tree, known locally as "the tree of life," provides food, shelter, and protection from desertification, and its deep roots prevent soil erosion, allowing vegetated grass to grow for grazing livestock. It's estimated that up to 90% of the economy in this region is owed to the argan tree.

Zoubida Charrouf: There are almost 3 million people who subsist on the argan tree because it provides a lot of working days for the local population. The extraction of the
oil alone provides almost 1 million working days. But the most important role is the environmental role. The argan tree is really the last green curtain on the desert.

Narrator: In just one generation, the international market for argan oil has risen from just 200 liters to 4,000 metric tons in 2019. By 2025, the state's ambition is to sell over 10,000 metric tons. To facilitate this increase, the area for producing the oil has expanded more than 100 miles south of Essaouira and is due to expand north.

As with any costly ingredient, argan oil products are often adulterated. Both cosmetic and culinary argan oil is often labeled as "pure" despite the undisclosed percentage of Argania kernel oil being mixed with a host of chemical compounds.

And cheaper, mechanically extracted oil has begun to appear on the market for as little as $22 a liter, threatening the stability of the local cooperatives. However, some cosmetic giants, such as L'Oréal, have committed to fair-trade programs to help ensure the stability of their argan oil and the preservation of the forest's biodiversity.

With the help of the cooperatives, the traditional skills held by the Amazigh women have created a booming industry. But even though this income has granted some financial independence in a male-dominated society, the women normally make less than $220 a month - below Morocco's recommended national minimum wage.

With the argan oil industry predicted to continue its growth, the prosperity of the Amazigh women remains to be seen.

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