Navigating the impact of Turkey's bulk olive oil export ban on European prices and deficits
- L'Albatros International Trading Ltd.
- Dec 19, 2023
- 1 min read
Updated: Dec 27, 2023
Navigating the impact of Turkey's bulk olive oil export ban on European prices and deficits
Revitalizing Europe's Olive Oil Market: Turkish Exports Poised to Bridge the Gap Once Ban is Lifted
Bulk olive oil exports from Turkey were scheduled to resume on November 1st. However, the Ministry of Commerce extended the July 2023 ban indefinitely in mid-October, citing high olive oil prices.
Despite the added uncertainty, officials from the country’s national olive oil association expect Turkey to play a significant role in supplying olive oil to European markets as the 2023/24 crop year progresses.
"Turkey will continue to contribute to the supply shortage that will arise from the ongoing low yields in other olive-growing countries, especially in packaged products, as it did last year."
Mustafa Tan, president, National Olive and Olive Oil Council.
Last year, Turkey broke a historical record by 421,000 tons of olive oil,” Mustafa Tan, the president of the National Olive and Olive Oil Council, told Olive Oil Times. “This made our country the second-largest producer of olive oil in the world.”
While this year’s harvest is expected to fall significantly, with the initial estimate that production will reach just 180,000 tons, Tan indicated the country’s olive oil stocks combined with the new production would be enough to meet domestic demand and resume bulk exports.
“This year, after excluding the record export amount of 150,000 tons and the same amount of domestic consumption, we have an end-of-period carryover stock of around 180,000 tons,” he said.
“This amount enables more exports and domestic consumption than last year,” Tan added. “In other words, Turkey continues to be the country with the highest supply after Spain, with its stock carried over from last year and its production this year.”
Producers in the country said this year’s decline was mainly due to many of the country’s groves entering an ‘off-year’ in the natural alternate bearing cycle for the olive tree and some damage caused by extreme weather events.
Bulk olive oil exports from Turkey were scheduled to resume on November 1st. However, the Ministry of Commerce extended the July 2023 ban indefinitely in mid-October, citing high olive oil prices.
Despite the added uncertainty, officials from the country’s national olive oil association expect Turkey to play a significant role in supplying olive oil to European markets as the 2023/24 crop year progresses.
Turkey will continue to contribute to the supply shortage that will arise from the ongoing low yields in other olive-growing countries, especially in packaged products, as it did last year.- Mustafa Tan, president, National Olive and Olive Oil Council
“Last year, Turkey broke a historical record by producing 421,000 tons of olive oil,” Mustafa Tan, the president of the National Olive and Olive Oil Council, told Olive Oil Times. “This made our country the second-largest producer of olive oil in the world.”
While this year’s harvest is expected to fall significantly, with the initial estimate that production will reach just 180,000 tons, Tan indicated the country’s olive oil stocks combined with the new production would be enough to meet domestic demand and resume bulk exports.
“This year, after excluding the record export amount of 150,000 tons and the same amount of domestic consumption, we have an end-of-period carryover stock of around 180,000 tons,” he said.
“This amount enables more exports and domestic consumption than last year,” Tan added. “In other words, Turkey continues to be the country with the highest supply after Spain, with its stock carried over from last year and its production this year.”
Producers in the country said this year’s decline was mainly due to many of the country’s groves entering an ‘off-year’ in the natural alternate bearing cycle for the olive tree and some damage caused by extreme weather events.
While the National Olive and Olive Oil Council did not publish its official harvest forecasts until September, growers and producers saw evidence of a poor harvest by early July.
Expectations of an unprecedented situation in which global olive oil production declined for a second consecutive year, paired with already historically high prices, led to the Turkish government implementing the bulk ban – individually packaged exports are still permitted – which has been met with dismay by some producers and exporters.
However, Turkey has a history of olive oil export bans, with the latest prohibition being the third one in as many years.
In April 2021, the country’s trade ministry imposed a five-month ban on bulk exports, citing uncertainty caused by the unfurling Covid-19 pandemic.
The following April, the ministry prohibited bulk exports again due to concerns about shortages in the country and skyrocketing inflation. The ban remained in place until the end of the year.
As a result, officials are confident this ban will not extend beyond the end of the current harvest, especially if rain falls across the Mediterranean this winter and spring, which would bode well for the 2024/25 crop year.
“Turkey will continue to contribute to the supply shortage that will arise from the ongoing low yields in other olive-growing countries, especially in packaged products, as it did last year,” Tan concluded.
The Bulk Olive oil Ban : Türkiye
Officials in Turkey have prohibited bulk olive oil exports until November 1st, citing rising domestic prices.
The combination of the country’s record-breaking olive oil production in the 2022/23 crop year, combined with poor harvests in southern Europe and North Africa, has led to a spike in global olive oil prices and increased demand for Turkish olive oil.
According to the country’s trade ministry, Turkish olive oil exports by volume from November 2022 to July 2023 increased by 240 percent compared to the same period of the previous season and reached 136,500 tons.
Over the same period, higher-value packaged exports rose by 3 percent, while bulk olive oil exports quintupled. As a result, bulk olive oil exports increased from 42 percent of total exports to 83 percent.
The ministry attributed the meteoric rise in bulk exports to increased demand from bottlers in Spain and Italy, which bought 21 and 44 times more bulk olive oil, respectively, from November 2022 to July 2023 compared to the same period in the previous season.
According to the International Olive Council, Turkey’s olive oil exports are projected to reach a record-high 134,000 tons in the current crop year, which runs from October 2022 to September 2023.
However, the ministry also cited high customs duties imposed by the European Union on individually-packaged imports for the much lower increase in demand and cited these trade restrictions as a reason to prohibit bulk exports.
The significant rise in bulk exports combined with low harvest expectations for the 2023/24 crop year has also contributed to the 102-percent rise in olive oil prices in Turkey from June 2022 to June 2023.
Over the same period, prices in Spain, Italy and Greece rose by 84 percent, 58 percent and 72 percent, respectively.
Along with its dismay at European restrictions on individually packaged exports, the ministry cited rising domestic prices as another reason to prohibit bulk exports.
The bulk olive oil export ban is the third one in as many years. In April 2021, the country’s trade ministry imposed a five-month ban on bulk olive oil exports, citing uncertainty caused by the unfurling Covid-19 pandemic.
Almost exactly a year later, in April 2022, the ministry moved to prohibit bulk olive oil exports due to concern over shortages in the country and skyrocketing inflation. The ban remained in place until the end of the year.
This year’s export prohibition appears to fall in line with the country’s broader export strategy, which aims to increase its export-to-import ratio by 80 percent by shifting away from low-quality bulk exports to higher-quality added-value exports across a range of sectors: from technology to agricultural goods.
“We are working with all our strength to reach the export target of $265 billion for 2023,” said Mustafa Gültepe, president of the Turkish Exporters Assembly.
Source : Olive oil Times
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