Olive Oil Producers in Turkey Decry Export Freeze

Turkey’s temporary olive oil export ban has brought down domestic prices while causing headaches for exporters.
By Ofeoritse Daibo
Oct. 23, 2023 19:26 UTC

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 1st 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.

See Also:Signs Suggest a Weak Harvest in Turkey

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.”


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