Turkey's Recurrent Olive Oil Crisis

Summary

Turkey’s olive oil exports have plum­meted from 92,000 tons to 7,000 tons due to high prices and com­pe­ti­tion from other coun­tries. Producers in Turkey are strug­gling due to high pro­duc­tion costs, lack of a sta­ble pro­duc­tion sys­tem, and chal­lenges in com­pet­ing in the global mar­ket.

Turkey’s olive oil exports have decreased from 92,000 tons to just 7,000 thou­sand tons since the 2012/2013 sea­son due to the increase in prices and other fac­tors.

Davut Er, the head of Olive Oil Exporters Union said that Turkey can’t com­pete in the for­eign mar­ket with prices that were around 14 YTL per litre ($4.78), com­pared to 8 – 9 YTL in Spain, 6 YTL in Egypt and 9 YTL in Greece at the begin­ning of this sea­son.
See Also:The Year’s Best Olive Oils from Turkey
Ten of Turkey’s active export­ing com­pa­nies left the mar­ket. In one sea­son, exports dropped from 83 per­cent. Davut Er said that even though the olive oil prices in Turkey have now dropped to 11 YTL, con­sump­tion has not increased because the cost of the prod­ucts on the shelves are higher than peo­ple want to pay.

In Balikesir, one of the most impor­tant cities involved in the pro­duc­tion of olive oil in Turkey, hun­dreds of tons of olive oil remain in the hands of the pro­duc­ers.

We spoke with Ahmet Sucu, the head of Ozgun Zeytin, the 25-year-old olive oil com­pany of whose olive oil was cho­sen among the top 35 oils by Feinschmecker. Sucu com­plained that Turkey’s pro­duc­tion costs are con­sid­er­ably higher than for­eign pro­duc­tion costs, hence the price of Turkish olive oil is accord­ingly higher and Turkey can’t com­pete in the for­eign mar­ket.

Sucu noted that the prob­lems in the olive oil indus­try in Turkey is not a recent prob­lem, and it hap­pens every few years. Turkey can only com­pete effi­ciently in the mar­kets when the yield of European pro­duc­ers drops. He also com­plained about the lack of ​“a proper olive oil agenda in Turkey,” that there is no sta­ble pro­duc­tion of olive oil, result­ing in a sig­nif­i­cantly dif­fer­ent yield each year.

Sucu agreed that Turkey’s pro­duc­tion costs are higher due to the dif­fer­ence in ter­rain con­di­tions, har­vest­ing cir­cum­stances, higher labor cost and the cost of har­vest machines. The high prices also affect the domes­tic mar­ket of Turkey as con­sumers tend to buy cheaper oils instead of olive oil. When the prices were reduced this year, con­sumers had already switched to buy­ing prod­ucts other than olive oil and the reduc­tion in prices were not enough to return past con­sumers to using olive oil again.

In Europe, Sucu said, farm­ers are paid €1.30 per kg of olive oil they sell, where in Turkey this num­ber is 0.80 YTL, or about €0.24. He added that in order to improve the olive oil indus­try in Turkey, the pro­duc­tion costs need to be reduced which can only be done through the imple­men­ta­tion of mechan­i­cal agri­cul­ture sys­tems.

There are only 6 or 7 har­vest­ing machines used in the Ayvalik region of Balikesir, which is one of the big­ger olive oil pro­duc­tion sites in Turkey. He guessed that there are prob­a­bly not even 50 machines of this kind in total through­out all of Turkey.

Producers also com­plain of fake prod­ucts and adul­ter­ation in the olive oil indus­try as the Ministry of Food, Agriculture and Livestock announced on September 1 the names of more than 30 com­pa­nies involved in fraud. Producers com­plain that fines are not enough dis­in­cen­tive: the fake pro­duc­ers can get away with pay­ing a mere 9,700 YTL ($3,309) penalty.