Tunisian olive oil overcomes Italian protests, climate change
Tunis - Tunisia has won more olive oil shares to key European Union markets despite a noisy campaign by Italian farmers protesting the suppression of duties on Tunisian production, the country’s Oil National Office chief said.
A bumper olive crop led to unprecedented export volumes of Tunisian olive oil in 2015. Poor harvests in Spain and Italy meanwhile drove international prices for olive oil to their highest levels since 2006.
Prices for olive oil reached $5,800 a tonne last August, compared with $4,100 in August 2014, increasing Tunisian revenues from olive oil exports.
But there will be no repeat of the 2015 Tunisian olive oil bonanza in the 2016 harvest which ended in February as olive trees cannot produce a good crop two years in a row.
“Last season brought about a record of output and a record of exports respectively of 340,000 tonnes and 312,000 tonnes,” Tunisian Olive Oil National Office head Chokri Bayoudh said.
“For the 2015-16 harvest, the olive oil production is 140,000 tonnes and we plan a total of exports at 100,000 [tonnes]. It is a shortfall of 60% when compared to the previous period,” he said.
Olive oil represents more than 10% of Tunisia’s exports and ensures the livelihood of hundreds of thousands of people.
“Olive oil exports bolstered Tunisia’s trade balance and its hard currency revenues last year,” said Bayoudh. The value of olive oil sales abroad is at more than $1 billion.
“The culture is resilient to crises. Even in the worst circumstances of January 2011, exports continued to flow,” Bayoudh said. Tunisia has 80 million olive trees, covering one-third of its arable land. The crop relies on rain.
“The phenomenon of drought is increasingly frequent in the south and centre of the country due to climatic change,” he said.
As a result, the country is turning to northern areas for olive cultivation to ease the effects of drought elsewhere.
“We plan to grow 50,000 hectares for a five-year period beginning 2016 in the north where rainfall is more frequent than in the south and the centre to increase olive oil output from northern areas to 30% from 20% currently,” said Bayoudh.
“The state will subsidise totally or partially these planned plantations undertaken by farmers.”
The authorities will provide financial and other aid to farmers to water olive farms by trucked tanks in dry times, he said.
“The export season for olive oil is under way and it is going well despite the media campaign in Italy. This campaign did not harm Tunisia exports because our Italian clients knew better the quality of our oil,” he said.
The European Union in April removed customs duty from 70,000 tonnes of Tunisian olive oil imports over 2016 and the following year as part of a plan to help the North African country’s stricken economy.
“The EU’s decision is a new proof of Europe’s trust and confidence in the quality of our oil,” Bayoudh said.
Italian producers criticised the EU move, saying it threatens their livelihood and risks flooding Europe with “fake oil”.
Italian farmers’ association Coldiretti said the decision to remove the duty was bad news for consumers and producers of olive oil in Italy and beyond.
“It doesn’t help Tunisian producers, harms Italian ones and increases the risk that consumers will be exposed to fraud,” said Coldiretti President Roberto Moncalvo.
Coldiretti fears cheaply imported Tunisian oil could be mixed with Italian oil and falsely labelled “Made in Italy” for a premium price on the international market.
“The removal of taxes will only increase exports for Tunisian farmers by 3%. It’s difficult to see how that is enough to benefit its rural economies,” Moncalvo said.
Despite the producers’ distaste, the decision was approved by a large majority in Brussels.
Federica Mogherini, EU High Representative for Foreign Affairs and Security Policy, told La Repubblica the decision was “a just compromise”.
“It will have minimal impact on the Italian and European economy. Supporting Tunisian democracy in a difficult moment is in the interest of the EU and Italy,” Mogherini said.
Other Italian politicians slammed the move. “It’s an embarrassment that (Prime Minister) Matteo Renzi’s government has not opposed this,” said Tiziana Beghin, a leading member of the populist Five Star Movement.
“Our clients in Italy know the situation clearly. The quality of our oil is not in doubt because we are the only country where the state controls the quality of oil before exports,” said Bayoudh.
The challenge for Tunisia’s olive oil industry is not just to find ways to increase production, but also to export less oil in bulk and more Tunisian-bottled and branded products, experts say.
More than 75% of Tunisia’s output is exported in bulk to Italy and Spain, where it is mixed with local oil before being bottled and marketed as a product of those countries.
“The bulk market is our main export outlet and it is good for our oil. In parallel, we are improving our ability to sell the product in other ways. We made progress in that with 20% of our produce sold outside the bulk market compared to barely 1% before and we are continuing our effort,” said Bayoudh.