Winners and Losers in the Growing American Market for Bulk Imports

Summary

Bulk olive oil imports to the U.S. are increas­ing, with Argentina and Turkey expe­ri­enc­ing sig­nif­i­cant increases while Tunisia and Morocco saw decreases, par­tially due to poor crops in Spain. The increase in exports from Argentina and Turkey is attrib­uted to gov­ern­ment poli­cies and mod­ern­iza­tion, while the decrease in exports from Tunisia and Morocco is linked to qual­ity issues and drought.

Bulk olive oil imports to the United States are on the rise. The world’s largest olive oil importer increased its demand for con­tain­ers weigh­ing 18 kilo­grams or more by 26 per­cent.

However, not all of the main exporters to the U.S. ben­e­fited from this shift­ing demand. Argentina and Turkey both expe­ri­enced sig­nif­i­cant increases in exports, while Tunisia and Morocco saw sub­stan­tial decreases.

Bulk exports from Argentina nearly dou­bled, while from Turkey exports increased more than five-fold. Uncertainty in Spanish sup­ply, which exported 13,000 fewer tons of olive oil to the U.S. last year, helped to spur on these increases.

“The poor crops in Spain in three of the past five years are dri­ving inter­est in alter­na­tive sources of oil,” Gregg Kelley, CEO of California Olive Ranch, told Olive Oil Times. ​“Argentina has ben­e­fited from changes in gov­ern­ment poli­cies mak­ing it eas­ier to export, and Turkey has expanded their pro­duc­tion capac­ity tremen­dously over the past 10 years.”

Ümmühan Tibet is the chair­man of the board of Turkey’s National Olive Oil Council. He attrib­uted these increases in exports to Turkey’s rapidly mod­ern­iz­ing olive oil sec­tor as well as increas­ingly strict qual­ity stan­dards.

“In Turkey, olive oil pro­duc­tion has under­gone remark­able devel­op­ments since the 1980s and more olive oil plants have either started to pro­duce vir­gin olive oil or increased their pro­duc­tion capac­ity,” Tibet said. ​“Today, Turkey has large-scale olive oil plants with mod­ern bot­tling lines.”

According to Tibet, Turkey has strict stan­dards for olive oil des­tined for export. Since many Turkish oil exports are des­tined to the European Union, Turkish exporters have been meet­ing these high stan­dards for years.

“There are com­pul­sory export stan­dards for olive oil and table olives in Turkey, thus, pro­duc­tion in all plants con­forms to the Regulations of Turkish Codex,” he said. ​“These reg­u­la­tions are also con­sis­tent with the International Olive Council Trade Standards and Regulations of the European Union,” he said.

Meanwhile, the increase in exports from Argentina has largely been attrib­uted to President Mauricio Macri’s poli­cies of eco­nomic lib­er­al­iza­tion. Macri removed cur­rency con­trols, which pre­vented Argentine busi­nesses from trans­act­ing domes­ti­cally in for­eign cur­ren­cies, espe­cially U.S. dol­lars. He also rescinded agri­cul­tural export quo­tas and began pro­mot­ing trade and improved rela­tions with the U.S.

“Timing was also good for Argentina. Before the changes in Argentina’s gov­ern­ment, sup­pli­ers focused more heav­ily on the local mar­ket, but now they are able to look towards a more global level,” Jim Lipman, the vice pres­i­dent of prod­uct oper­a­tions at California Olive Ranch, said.

“Quality is also a fac­tor. The higher the qual­ity of the oil, the more mar­kets it can serve in the U.S. and, in turn, it will increase the vol­umes imported.”

Meanwhile, bulk exports from Tunisia and Morocco decreased by 35 per­cent and 67 per­cent, respec­tively. American olive oil importers attrib­uted both qual­ity and drought to these decreases. According to importers, Tunisian and Moroccan olive oil gen­er­ally do not rank well in terms of qual­ity.

“Tunisia and Morocco had suf­fered from a drought. Because of that, they had a sig­nif­i­cant reduc­tion of sup­ply,” Lipman said. ​“Also, in those sit­u­a­tions, they had lower qual­ity oil which would limit the mar­kets in the U.S. that it could serve.”

Sélim Belkhodja is the direc­tor of Bulla Regia, a Tunisian com­pany that exports olive oil to the United States. He denied that qual­ity is the issue and said that based on recent cli­matic con­di­tions, olive oil exports would fluc­tu­ate.

“The quan­ti­ties of olive oil exported by Tunisia depend on the yearly pro­duc­tion,” he said. ​“And we have a big dif­fer­ence annu­ally due to the weather con­di­tions.”

According to the International Olive Council, how­ever, bulk imports to the U.S. from Tunisia have decreased in four of the past five years.

The Tunisian Ministry of Economy offered an alter­na­tive expla­na­tion to those of Lipman and Belkodja. A spokesper­son from the min­istry said that Tunisia was look­ing toward emerg­ing olive oil mar­kets in the Gulf, but was also quick to denounce the asper­sions of the qual­ity of Tunisian olive oil.

“The Middle East, notably Qatar and Saudi Arabia, is con­sid­ered among the most attrac­tive zones for Tunisia given the ris­ing con­sump­tion trends,” the spokesper­son said. ​“This is undoubt­edly due to the fact that olive oil exporters have man­aged to meet the chal­lenge of qual­ity by incor­po­rat­ing the lat­est tech­no­log­i­cal break­throughs and work­ing on brand­ing.”

• International Olive Council