Olive Oil Producers in Turkey Decry Export Freeze

Summary

Turkey’s olive oil export ban, imple­mented to lower domes­tic prices, is caus­ing con­cern among local pro­duc­ers and European con­sumers, who are now seek­ing alter­na­tive sup­pli­ers such as Albania, Chile, and Tunisia. The ban, which only affects bulk exports, has led to ques­tions about the reli­a­bil­ity of Turkish olive oil exports and is result­ing in sig­nif­i­cant losses for pro­duc­ers who are fac­ing higher pro­duc­tion costs and decreased rev­enue.

Local pro­duc­ers and European con­sumers feel the impacts two months into Turkey’s olive oil export ban.

In August, Turkey’s Ministry of Trade tem­porar­ily restricted bulk exports until November 1^st to lower high domes­tic olive oil prices due to a feared global short­age.

The pro­hi­bi­tion only applies to sales of olive oil in pack­ages of more than 16 kilo­grams and does not include higher-value indi­vid­u­ally pack­aged olive oil exports. However, the ban has led to push­back from local pro­duc­ers.

“It was an easy solu­tion to ban exports tem­porar­ily, but was it the best solu­tion?” asked Yusuf Urgan, an econ­o­mist and busi­ness con­sul­tant at Egina Olive Oil.

“They [the exporters] had long-term con­tracts and received some penal­ties,” he told Olive Oil Times.

Urgan added that the ban, the third of its kind in as many years, was call­ing the reli­a­bil­ity of Turkish olive oil exports into ques­tion.

“Turkish exporters have signed yearly or quar­terly con­tracts with importers,” an export spe­cial­ist at a Turkish olive oil pro­ducer told Olive Oil Times. ​“With the ban, Turkey loses reli­a­bil­ity, and may prompt importers to avoid imports from Turkey.”

Already, the ban is cost­ing Turkish pro­duc­ers their export mar­kets. As olive oil prices increase, European buy­ers seek urgent alter­na­tive sup­pli­ers, includ­ing Albania, Chile and Tunisia.

“Turkey’s biggest importer is Spain, which buys olive oil in bulk from Turkey and then bot­tles the prod­uct in Spain before sell­ing it under Spanish brands to the rest of the world,” the spe­cial­ist said. ​“Italy does the same.”

An esti­mated 50 per­cent of Turkish exports are in bulk. According to International Olive Council data, Turkey was expected to export a record-high 134,000 tons of olive oil in the 2022/23 crop year fol­low­ing an unprece­dented yield of more than 420,000 tons.

Although the ban may effec­tively ensure domes­tic prices go down, ​“it rep­re­sents some seri­ous losses for pro­duc­ers,” the spe­cial­ist said.

“For exam­ple, before the ban was imposed, domes­tic prices were 185 Turkish lira (€6.31) per kilo­gram,” the spe­cial­ist added. ​“After the ban, prices decreased to 170 Turkish lira (€5.80) in just one week. Turkish exporters have worked hard to earn their place in the world mar­ket, and the ban makes doing busi­ness harder.”

Urgan noted that Turkish olive oil pro­duc­ers faced mul­ti­ple chal­lenges before the ban, includ­ing higher costs for agri­cul­tural inputs, diesel and labor, result­ing in higher over­all pro­duc­tion costs. The ban means many pro­duc­ers face these higher costs after earn­ing less rev­enue.

Outside of Turkey, indus­try ana­lysts said the export ban has con­tributed to per­sis­tently high olive oil prices across Europe.

“There are con­cerns that the E.U.’s olive oil pro­duc­tion may plunge com­pared to the five-year aver­age,” Kyle Holland, an ana­lyst at Mintec, told local media. ​“The mar­ket may con­tract, which could lead to an increase in olive oil prices in the short-term.”

• Hurriyet Daily News