Export Ban Impacts Libyan Olive Oil Industry

Summary

Libyan olive oil pro­duc­ers are strug­gling due to a 2017 export ban, which has led to an increase in for­eign olive oil imports to meet domes­tic demand. The ban has not been lifted, caus­ing con­cerns among local farm­ers and pro­duc­ers about the long-term impact on the indus­try.

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.

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.

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.

“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.

• Arab News


• International Olive Council


• Tech Investor News