Tunisia Takes Measures to Lower Olive Oil Prices at Home as Export Revenues Fall

Low fixed prices for Tunisian bulk exports to Europe mean Tunisian farmers are not benefiting from the surge in global olive oil prices.
Sousse, Tunisia
By Ofeoritse Daibo
Dec. 18, 2023 13:09 UTC

Tunisia’s olive oil rev­enue has declined, accord­ing to TNI, an inter­na­tional research insti­tute. Farmers are pro­duc­ing less olive oil due to cli­matic con­di­tions, and most of the oil pro­duced is exported abroad at a cheap fixed price of €1.85 per liter.

As part of its part­ner­ship agree­ment with the European Union, Tunisia exports 90 per­cent of locally pro­duced bulk olive oil to the 27-mem­ber bloc, leav­ing only 10 per­cent for domes­tic con­sump­tion.

These are pat­terns that have emerged in past colonies. E.U. buy­ers blend Tunisian oils with other oils and bot­tle it. Most con­sumers aren’t aware that these blends are over­whelm­ingly Tunisian.- Sarah Ben Romdane, founder, KAÏA

The coop­er­a­tion agree­ment signed by the E.U. with the North African coun­try allows Tunisia to export up to 56,700 tons of duty-free olive oil to E.U. mem­ber states annu­ally. In the process, Tunisia has lost out on sig­nif­i­cant added value.

The dom­i­nant trade sys­tem in Tunisia is a bulk sys­tem, where the major­ity of olive oil is exported to the E.U. at a cheap com­mod­ity price,” Sarah Ben Romdane, founder of KAÏA, told Olive Oil Times.

See Also:Tunisia Has a Plan to Boost Its Olive Oil Industry

These are pat­terns that have emerged in past colonies,” she added. E.U. buy­ers blend Tunisian oils with other oils and bot­tle it. Most con­sumers aren’t aware that these blends are over­whelm­ingly Tunisian. My goal in launch­ing KAÏA was to imag­ine a new sys­tem and chal­lenge the old one.”

Over the past half-decade, Tunisia has yielded an aver­age of 257,000 tons of olive oil per annum.

According to local sources, olive oil pro­duc­tion is expected to rebound to 220,000 tons in the 2023/24 crop year, after a dis­ap­point­ing har­vest of 180,000 tons in 2022/23.

Indeed, most Tunisian olive oil is exported in bulk to Spain and Italy, blended and then re-exported under Spanish and Italian brands.

Ben Romdane said European pro­duc­ers make healthy prof­its this way, sell­ing cheap Tunisian olive oil to the detri­ment of Tunisian farm­ers, who are forced to con­tend with lower earn­ings against the back­drop of ris­ing infla­tion (at 8.3 per­cent in November).

Economically, farm­ers do not earn enough money, and peo­ple in the rural areas do not ben­e­fit from the olive oil rev­enue. Farmers are sell­ing bulk olive oil, and there’s no notion of prove­nance, ter­roir, trans­parency or trace­abil­ity,” she said. What I sell is proudly Tunisian. It involves sto­ry­telling, brand­ing and pack­ag­ing and allows me to enter the mar­ket through a dif­fer­ent route.”

This is why I have been inspired to cre­ate a fam­ily legacy, recon­nect with my Tunisian roots, and empower Tunisian cul­ture and ter­roir,” she added.

What Ben Romdane sells is a brand, and grad­u­ally, made in Tunisia” exports are on the rise – some 27,000 tons of oil bot­tled in Tunisia were shipped across the world in 2020, com­pared to a mere 400 tons in 2006.

Progress is slow, how­ever. It is not easy to take that route. It is also not easy to break the pat­tern of depen­dence on a for­mal colo­nial power,” Ben Romdane said. If you don’t have a French pass­port, you don’t have the ease to travel, attend trade shows and meet poten­tial clients.”

It’s also a mat­ter of being able to speak English and French, as well as visa priv­i­leges, ease travel. But there is not one way to be a Tunisian,” she added. Some Tunisians are grad­u­ally sell­ing pre­mium olive oil, but it’s still a niche mar­ket. Yet, there is a lot of rea­son to believe in Tunisian olive oil.”

On December 9, 2023, the Tunisian Economic Observatory called for the revi­sion of Tunisia’s annual olive oil export quota. It noted that the cur­rent free trade agree­ment demon­strates an unbal­anced rela­tion­ship between Tunisia and the EU.

The bulk sys­tem has remained because of struc­tural chal­lenges, includ­ing the cur­rency, which are dif­fi­cult to dis­man­tle,” Ben Romdane said. Moreover, the E.U. does­n’t have an inter­est in sup­port­ing Tunisian-made olive oil.”


The gov­ern­ment has tried to rene­go­ti­ate the com­mod­ity prices in the past,” she added. The inten­tion is cer­tainly there.”

Recently, the Tunisian gov­ern­ment announced plans to offer a pref­er­en­tial price for olive oil in the domes­tic mar­ket of 15 Tunisian dinars (€4.45) per liter to ensure Tunisians are not hurt by lower stocks at home.

In a joint press state­ment, two of Tunisia’s gov­ern­ment bod­ies, the Ministry of Agriculture, Water Resources and Fisheries and the Ministry of Trade and Commerce, announced that 10,500 tons of extra vir­gin olive oil would be kept aside for retail sales for con­sumers in the domes­tic mar­ket.

The oil will be pack­aged in one-liter bot­tles and mar­keted within Tunisia start­ing December 15th.

The export-focused ori­en­ta­tion of the sec­tor means farm­ers can­not sell much to the local mar­ket. Subsequently, the low olive oil sup­ply has raised prices domes­ti­cally.

In October 2023, the Tunisian min­is­ter, Abdelmonem Belati, indi­cated that the price of olive oil jumped from 15 dinars (€4.53) per kilo­gram in March 2023 to approx­i­mately 25 dinars (€7.54) per kilo­gram in October, an 80 per­cent increase.

At the time, Fawzi Al-Zayani, the head of the Union of Tunisian Farmers, esti­mated that olive oil prices in the domes­tic mar­ket were expected to reach 30 dinars (€9) per kilo­gram, caus­ing con­cern for the gov­ern­ment of Tunis.

As a result, Tunisian President Kais Saïed inter­vened by rec­om­mend­ing the new pref­er­en­tial price mea­sure.

This sale to the domes­tic mar­ket at a pref­er­en­tial price offers local con­sumers suf­fi­cient quan­ti­ties of extra vir­gin olive oil while con­sid­er­ing their pur­chas­ing power.

Given that the aver­age monthly house­hold income in Tunisia is between 201 and 500 dinars (about €60 to €150) and unem­ploy­ment reached 16.2 per­cent in the first quar­ter of 2023, this mea­sure aims to alle­vi­ate the eco­nomic bur­den on cit­i­zens.


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