Africa / Middle East

Export Ban Impacts Libyan Olive Oil Industry

A ban imposed to olive oil exports in 2017 was meant to protect the domestic production market. Producers say that it is having the opposite effect.

Jan. 15, 2019
By Rosa Gonzalez-Lamas

Recent News

After years of opti­mism derived from gov­ern­ment plans to strengthen the country’s olive oil sec­tor, par­tic­u­larly in export mar­kets, Libyan olive oil pro­duc­ers are now strug­gling to sur­vive.

Many say this is a direct result of an export ban imposed in 2017, which is hav­ing a neg­a­tive impact on the olive indus­try.

There is enough pro­duc­tion in Libya. I don’t under­stand why we can’t export any­more.- Zahri Al-Bahri, Libyan olive oil pro­ducer

The restric­tion of olive oil exports stemmed from an appar­ent short­age of olive oil sup­plies for the domes­tic mar­ket. This has been attrib­uted to exports in bulk at low prices, which the gov­ern­ment believes did not add value to the Libyan econ­omy.

This short­age has led to an increase in for­eign olive oil imports at higher prices in order to sat­isfy domes­tic demand. The gov­ern­ment sub­se­quently banned exports in order to pro­tect local pro­duc­tion and guar­an­tee an ade­quate stock of locally-pro­duced olive oil to sup­ply the domes­tic mar­ket.

See more: Africa and the Mid­dle East

Although the sus­pen­sion was meant to be tem­po­rary and the gov­ern­ment has rein­forced its inten­tion to develop the olive oil indus­try, the ban of olive oil exports has not yet been lifted and there are no signs that it will be lifted any­time soon. This has wor­ried local farm­ers and pro­duc­ers who think that enough olive oil is pro­duced in Libya to meet both export and domes­tic con­sump­tion demands and that this ban will impact the olive oil indus­try long-term.

Advertisement

There is enough pro­duc­tion in Libya,” Zahri Al-Bahri, a Libyan olive oil pro­ducer who owns his own press in the city of Tarhuna, told Arab News. I don’t under­stand why we can’t export any­more.”

Olive cul­ti­va­tion in Libya is ances­tral and there are areas where cen­te­nary olive trees con­tinue to pro­duce olives for olive oil. Nev­er­the­less, the mod­ern era of olive oil pro­duc­tion dates to the twen­ti­eth cen­tury, when Ital­ians occu­pied Libya in the 1930s and planted most of the trees that now exist in the coun­try.

My farm has existed for almost 90 years, when Ital­ians occu­pied Libya and brought the land back to life,” Ali Al-Nuri, an olive farmer in Tarhuna, told AFP.

Olives were a crop with eco­nomic sig­nif­i­cance before crude oil reserves were dis­cov­ered in the 1950s. Al-Nuri said that olive trees saved” Libyans dur­ing peri­ods of poor eco­nomic per­for­mance prior to its dis­cov­ery.

Libya is the world’s eleventh largest olive pro­ducer with an esti­mate eight mil­lion olive trees. Only 20 per­cent of the country’s olive pro­duc­tion is trans­formed into oil. Accord­ing to fig­ures from the Inter­na­tional Olive Coun­cil (IOC), annual pro­duc­tion more than dou­bled from the 1990/91 to the 2018/19 oil cam­paigns, grow­ing from 7,000 to 18,000 tons.

Olive oil helped diver­sify Libyan exports, which had relied strongly on crude oil exports since the fall of Muam­mar Gaddafi in 2011.

In 2013, the Libyan gov­ern­ment announced plans to strengthen olive oil exports by improv­ing the qual­ity of olives and olive oil pro­duc­tion with a view to increas­ing the value of global exports and expand­ing them inter­na­tion­ally to boost the country’s econ­omy.

To this end, the gov­ern­ment attempted to play a larger role in the sup­port of the entire olive oil pro­duc­tion chain, from the grove to the pack­ag­ing and mar­ket­ing, for which the devel­op­ment of a national brand name was planned.

The export ban not only has put a halt to the inter­na­tional pres­ence of Libyan olive oils, but has also had reper­cus­sions in the industry’s abil­ity to obtain the income, includ­ing for­eign cur­rency, which is nec­es­sary to invest in resources required for the sec­tor’s sus­tain­abil­ity, such as replace­ment parts for equip­ment, spe­cial­ized bot­tling and pack­ing plants and irri­ga­tion for the very dry areas where olive trees can be planted.

We con­stantly have prob­lems get­ting spare parts, which are get­ting expen­sive because of the col­lapse of the dinar against the dol­lar, but also because of the cost of the oil extrac­tion process,” Al-Bahri said.

This have made Libyan extra vir­gin olive oils less com­pet­i­tive. Addi­tion­ally, urban­iza­tion has become a men­ace for old olive trees, which now are being cut for char­coal and to cre­ate space for con­struc­tion, some­thing for­bid­den under Gaddafi’s rule.

The absence of scal­able pro­duc­tions has also con­strained olives from a white Tus­can olive vari­ety, intro­duced by Ital­ians, to a very sec­ondary role. Rather than stand­ing alone as a mono­va­ri­etal oil and max­i­miz­ing its sin­gu­lar traits, they are now mixed with other vari­eties for oil pro­duc­tion.

Libyan pro­duc­ers are more opti­mistic about the Arbe­quina from Spain, which is per­form­ing well in the coun­try and expand­ing its planted sur­face.

Last Novem­ber the IOC and Libya signed a col­lab­o­ra­tion agree­ment that aims to develop and sup­port Libya’s olive sec­tor by cre­at­ing and sus­tain­ing two lab­o­ra­to­ries, one for physico-chem­i­cal test­ing and the other for extra vir­gin olive oil organolep­tic assess­ment. Under this agree­ment the IOC will over­see the train­ing pro­grams and qual­i­fied staff.





Related News