Trade and industry are an integral part of every economy. Economies choose to trade so as to maximize their gains from trade. In order to do so, the country which has a comparative advantage in the production of a particular good chooses to export that particular good whereas the country which does not have a comparative advantage in the production of that good will choose to import it. In this manner, each country produces the good in whose production they are efficient and imports those goods in whose production they are not efficient enough as compared to the world economy. We all know that India is the largest exporter of rice, Brazil the largest exporter of french beans, United States of America the largest exporter of wheat, Italy the largest exporter of wine and the list goes on. But these are all commodities that we have heard of, commodities which are more or less necessities.
Have you ever wondered about the producers of commodities which generally go unnoticed by us all? For example, who is the largest producer of corks?
Yes, you read it right, the largest producer of corks.
The cork stoppers that are used to seal bottles of alcohol, those used in automobiles, in leather goods etcetera. The answer is Portugal. In Portugal almost 720,000 hectares of land is allotted for cultivation of oak trees so that the wood of these trees can be used to produce the corks. The cork industry accounts for 70% of the total exports of the Portuguese economy and supplies 50% of the total production of cork across the world. The countries that import these corks are Germany, USA and UK. These sales account for 16% of Portugal’s total foreign income. Overall, the cork industry contributed to 3% of the Portuguese GDP in 2008. So, what led to the rise of this cork industry particularly in Portugal?
Firstly, the country’s climatic conditions are suited for the growth and cultivation of oak trees. The Mediterranean climate, coupled with fertile soil, abundant sunlight and bountiful rainfall help to nurture the oak trees whose life span ranges from 150 to 200 years. It was these climatic conditions and the abundance of oak trees that led to Portugal being recognized for its cork production. Initially cork wood was used to build some materials in the ships in 14th century and then it was also realized that it could also be used to produce cork stoppers which seal wine bottles, the delicacy in Portugal. The term cork was coined by an Robert Hooke, an Englishman, and before that it was called ‘sovaro’.
The Portuguese recognized the important role cork played in their economy and passed their first environmental legislation to protect cork forests in 1209. In the 18th century cork production became Portugal’s main objective, and from then on, there was no looking back. Portugal took advantage of the knowledge that Theophrastus, a Greek philosopher, imparted when he wrote about the oak tree’s ability to renew its bark after it has been removed. Ever since then, Portugal took great measures to protect their forests and in the recent times is working towards the recycling of cork, as it is an eco-friendly material.
