While Tunisia is the world's third-largest olive exporter after Spain and Italy, with 70% of the crops grown on its 1.7m hectares of olive plantations sold abroad, the Mahgreb country is taking steps to consolidate its global position.
According to the International Olive Oil Council (IOC), total world consumption of olive oil should increase to 2.98m tonnes in 2010-2011, a year-on-year rise of about 1%. However, due mostly to climatic reasons global production is expected to decrease by 2.5% over the same period.
Tunisia is expected to suffer one of the largest drops in production, from 160,000 tonnes in 2009-2010 to 110,000 tonnes in 2010-2011, a decrease of 31.3%, according to Ministry of Agriculture estimates. Farmers blame climate change for the dry weather that has led to the lower yield. Ministry officials said in December that to meet foreign demand, Tunisia will have to dip into its stockpile from the previous season, with 25,000 tonnes of stocks used to raise exports.
Olive oil accounts for half of the country's agricultural exports, which all together represent 10% of total exports. Tunisia is the world's second-largest exporter after the EU (438,000 tonnes) and ahead of Syria (50,000 tonnes), Morocco (40,000 tonnes) and Turkey (38,000 tonnes).
Tunisian olive farmers say export quotas set by the EU - due to pressure from the bloc's own olive oil manufacturers - are unfair and damaging the industry. The EU limits Tunisian imports to 1000 tonnes in January and February when demand is strong, only increasing in the last months of the year when demand in Europe stagnates. Tunisia benefits from a sunnier climate that ripens the olives more quickly, allowing them to be harvested a few months earlier than European competitors on the northern shores of the Mediterranean. During a mid-December working session on the 2010-2020 outlook for the industry, the Ministry of Agriculture stressed the need to counterbalance market fluctuations by creating service cooperatives of producers, mill owners, and exporters. These cooperatives will purchase surplus olive oil, store it and make it available to exporters at times of highest global demand, said the ministry.
However, the country is also taking a number of steps to increase the visibility of Tunisian products, both in traditional markets and further afield. The Chamber of Commerce and Industry (CCI) of Sfax also recently launched Darezzit.com, a website promoting Tunisian olive oil. The website allows producers to consult data on offers and purchase requests made by partners of the CCI. It also provides industry news as well as indicators like olive oil prices on international markets and a directory of mills and regulations relating to exports.
Currently, the majority of olive oil is exported unprocessed and in bulk, but the country is aiming to increase its share of higher-quality exports in the global market. In January 2010, the Ministry of Industry launched "100% Tunisian", a website that aims at promoting Tunisian olive oil in the US. Representing more than 50 producers, the site includes information on where to purchase Tunisian olive oil and seeks to draw in representatives and distributors abroad. Rassaa Abdelaziz, secretary of state for Renewable Energy and Food Industries, recently announced the 2011 launch of a Tunisian quality label for olive oil and in early November, unveiled plans to raise the production of packaged and processed olive oil (as a share of total olive oil production) to 10% from 2011.
Bottled exports reached 7570 tonnes in 2010, representing 7.6% of Tunisian olive oil exports and 11% of revenues. It is a sharp rise from 2006, when just 1600 tonnes of bottled olive oil were exported. That year, the Fund for the Promotion of Processed Olive Oil (Fonds de Promotion de l'Huile d'Olive Conditionnée, FOPROHOC) was created, in order to encourage producers to enhance export value by processing their oil to international quality; the fund offers annual subsidies of up to €37,000 for pertinent investments. The number of Tunisian companies exporting packaged olive oil has since increased from nine in 2006 to 36 in 2010 while a number of export firms have received support from Foprohoc for marketing programmes.
Tunisian olive oil producers have also begun to explore new export markets such as China. In December Tunisia's National Office of Olive Oil (ONH) and the IOC organized a joint campaign promoting Tunisian olive oil in Chinese newspapers and television channels. Similarly, Poulina Group Holding (PGH), the Tunis-based conglomerate, recently built a bottling factory in Jiangsu, 150 km from Shanghai. It is estimated that the annual consumption of olive oil in China will reach 100,000 tonnes in five years, a considerable market that Tunisia will be hoping to move in on before its European rivals.
© Oxford Business Group 2011
