Turkey Lifts Ban on Bulk Olive Oil Exports

Summary

Turkey’s olive oil pro­duc­ers are prepar­ing to increase exports to the United States, Japan, and Australia after the lift­ing of bulk olive oil export restric­tions, aim­ing to com­pete with European pro­duc­ers on qual­ity and price. By 2025, Turkey plans to enhance its pres­ence in key mar­kets through tar­geted mar­ket­ing and trade part­ner­ships, with a focus on increas­ing exports to North America and the European Union. Despite chal­lenges such as exces­sive inven­tory lev­els, Turkish pro­duc­ers are expected to play a more sig­nif­i­cant role in the global olive oil mar­ket due to favor­able pric­ing, qual­ity, and strate­gic ini­tia­tives.

Turkey’s olive oil pro­duc­ers are prepar­ing to ramp up exports to the United States, Japan and Australia fol­low­ing the com­plete lift­ing of bulk olive oil export restric­tions.

They aim to com­pete with European pro­duc­ers on qual­ity and price while mak­ing sig­nif­i­cant gains in other key mar­kets, includ­ing Saudi Arabia, the United Arab Emirates, China and Japan, where demand is increas­ing.

By 2025, Turkey plans to enhance its pres­ence in these regions through tar­geted mar­ket­ing and trade part­ner­ships.

The ban was lifted 13 months after the Turkish gov­ern­ment sus­pended bulk olive oil exports to sta­bi­lize domes­tic prices and encour­age the export of indi­vid­u­ally pack­aged olive oil, which com­mands higher prices than bulk olive oil.

“The restric­tion on olive oil exports in Turkey was done to pre­vent prices from ris­ing in the domes­tic mar­ket,” said Mustafa Tan, pres­i­dent of the National Olive and Olive Oil Council. ​“However, since prices in the domes­tic mar­ket are related to world prices, this effect was not seen much.”

In June, after intense lob­by­ing by pro­duc­ers and exporters, the gov­ern­ment eased the ban, allow­ing 50,000 met­ric tons to be exported until November.

“The sec­tor con­stantly asked for the export restric­tion to be lifted,” Tan said. ​“Therefore, our sec­tor is sat­is­fied with the deci­sion taken. With the lift­ing of export restric­tions on olive oil, sec­tor rep­re­sen­ta­tives started to see the way ahead. The lift­ing of export restric­tions on olive oil will move the sec­tor higher.”

Turkish olive oil pro­duc­ers face the oppo­site chal­lenge, with exces­sive inven­tory lev­els after sev­eral years of robust har­vests and some dif­fi­cul­ties export­ing indi­vid­u­ally pack­aged olive oil.

“Turkey’s olive oil exports are pre­dom­i­nantly con­fined to bulk sales,” said Serkan Yasser, an export spe­cial­ist. ​“Before the ban, there was con­cern regard­ing a poten­tial sup­ply short­age for the domes­tic mar­ket. However, our cur­rent chal­lenge is the accu­mu­la­tion of exces­sive olive oil stocks.”

According to Mehmet Emre Uygun, chair­man of the Aegean Olive and Olive Oil Exporters’ Association (EZZIB), Turkey had about 150,000 tons of olive oil stocks head­ing into the start of the crop year.

Observers expect Turkey to pro­duce about 350,000 tons of olive oil in the 2024/25 crop year. With domes­tic con­sump­tion of around 120,000 tons per annum, Emre Uygun and other Turkish pro­duc­ers and offi­cials worry they will have too much olive oil that will not be exported before it loses qual­ity.

Some sup­ply chain experts expect that Turkish pro­duc­ers could imme­di­ately fill the void left by two years of below-aver­age har­vests in much of the Mediterranean. Spain and Italy will have vir­tu­ally no olive oil stocks until the har­vest peaks in November and December.

“As Europe grap­ples with pro­duc­tion chal­lenges, Turkey has emerged as a for­mi­da­ble com­peti­tor,” said Sean Zacot, pres­i­dent and chief exec­u­tive of sup­ply chain advi­sory Boss Global Strategy.

The country’s favor­able cli­mate, com­pet­i­tive pric­ing and strate­gic ini­tia­tives have helped it gain mar­ket share.

“Spain is cur­rently fac­ing pro­duc­tion chal­lenges attrib­uted to drought and cli­mate change, result­ing in sig­nif­i­cant sup­ply gaps within the global olive oil mar­ket,” Zacot said.

“In response, Turkey has suc­cess­fully increased its pro­duc­tion capac­ity and is offer­ing olive oil at com­pet­i­tive prices,” he added. ​“This devel­op­ment has led to a height­ened demand for Turkish olive oil in key mar­kets, par­tic­u­larly within the European Union, where Spain has his­tor­i­cally held a dom­i­nant posi­tion.”

According to Zacot, the recent depre­ci­a­tion of the Turkish lira makes exports far more com­pet­i­tive than those of European com­peti­tors.

“This pric­ing advan­tage, cou­pled with the high qual­ity of Turkish olive oil, has enabled Turkey to attract new buy­ers and expand its mar­ket share,” he said. ​“Projections indi­cate that by 2025, Turkey will con­tinue to cap­i­tal­ize on its cost com­pet­i­tive­ness to enhance its export capa­bil­i­ties fur­ther.”

“This sit­u­a­tion has enabled Turkish pro­duc­ers to suc­cess­fully enter price-sen­si­tive mar­kets in Asia, Africa and Latin America,” he added.

Significant gov­ern­ment invest­ment, the intro­duc­tion of new agro­nomic prac­tices and the con­struc­tion of mod­ern mills have improved the qual­ity of Turkish olive oil, allow­ing pro­duc­ers to shift from focus­ing on bulk to indi­vid­u­ally pack­aged exports.

“There is a par­tic­u­lar empha­sis on organic and sus­tain­ably pro­duced olive oil, which aligns with global con­sumer trends,” Zacot said. ​“Traditionally, Turkey has been rec­og­nized as an exporter of bulk olive oil; how­ever, there is a notable shift towards estab­lish­ing robust domes­tic brands. Companies increas­ingly invest in brand­ing, pack­ag­ing and mar­ket­ing strate­gies to posi­tion Turkish olive oil as a pre­mium prod­uct.”

However, many pro­duc­ers in the coun­try remain reliant on export­ing in bulk to the world’s largest bot­tlers. Indeed, some have seen calls for lift­ing the export ban as a tacit admis­sion that indi­vid­u­ally bot­tled exports did not work as well as the gov­ern­ment had hoped.

Still, as olive oil pro­duc­tion quan­tity and qual­ity con­tinue to rise, Turkish offi­cials and pro­duc­ers antic­i­pate an increas­ing role for the coun­try in the global olive oil mar­ket.

“Turkey’s olive oil exports expe­ri­enced a remark­able increase of over 80 per­cent dur­ing the 2022/23 crop year, effec­tively address­ing the sup­ply defi­cien­cies result­ing from short­falls in European pro­duc­tion,” Zacot said.

“The estab­lish­ment of new olive groves, cou­pled with invest­ments in advanced pro­cess­ing facil­i­ties, posi­tions Turkey for fur­ther enhance­ment of its pro­duc­tion capac­ity,” he added. ​“By 2025, Turkey aspires to achieve annual olive oil exports exceed­ing 130,000 tons.”

He indi­cated that export­ing to the United States and Canada is at the top of many pro­duc­ers’ minds, where will­ing­ness-to-pay is higher than in other parts of the world, and demand is steadily ris­ing.

“Turkish pro­duc­ers are pro­gres­sively direct­ing their efforts towards the North American mar­ket by uti­liz­ing e‑commerce plat­forms and direct-to-con­sumer sales chan­nels,” Zacot said. ​“It is antic­i­pated that by 2025, Turkey will enhance its exports to North America by empha­siz­ing pre­mium prod­ucts and organic olive oil.”

However, the E.U. remains a cru­cial mar­ket for Turkish olive oil, rep­re­sent­ing a sub­stan­tial share of its exports.

“In light of pro­duc­tion chal­lenges faced by Spain, Turkish olive oil has estab­lished a more promi­nent pres­ence in Europe, espe­cially in nations such as Italy, Germany and France,” Zacot said. ​“By 2025, Turkey intends to rein­force its stand­ing in the E.U. by posi­tion­ing its olive oil as a high-qual­ity and cost-effec­tive alter­na­tive.”

“By cap­i­tal­iz­ing on sup­ply defi­cien­cies in tra­di­tional mar­kets, uti­liz­ing com­pet­i­tive pric­ing strate­gies, and mar­ket­ing its olive oil as a pre­mium prod­uct, Turkey is poised to rein­force its sta­tus as a promi­nent par­tic­i­pant in the global olive oil indus­try,” he con­cluded.

• Turkish Agrinews
• Anadolu Agency