Olive oil producers in Türkiye are facing multiple challenges, including the risk of losing their markets amid turmoil in the global olive market and a ban on exports.
The price of olive oil has been on the rise globally, skyrocketing more than 100 percent, due to drought in European countries and a ban the Turkish government introduced on exports in August.
Spain is the world’s largest olive oil producer. Other major producers include Italy, Greece, Türkiye and Tunisia.
Türkiye annually produces some 420,000 tons of olive oil.
The ban is costing Turkish producers their export markets. As prices increase, buyers in Europe are moving away from Türkiye and turning to alternative suppliers such as Tunisia and Syria,according to people from the industry.
According to the U.S. Department of Agriculture, olive oil prices climbed to $8,900 per ton in September. This increase was triggered by a more than 50 percent decline in Spain’s production.
“Exporting our products has always been important to us. But, these days, Syria is standing out as a major oil exporting country,” said Ali Uçar, the president of the local Chamber of Commerce in Ayvalık, one of Türkiye’s famous districts with olives and olive oil production.
Uçar complained that companies cannot sell olive oil in bulk to European countries because of the ban. “We can only export our products to Far Eastern countries.”
The export price for olive oil is around $4.5 to $5 per kilogram this season, while in the domestic market, the wholesale price is between 115 Turkish liras and 120 liras per kilogram, he said.
“If the export ban stays, those prices will have adverse effects on producers in the new season.”
After the ban, foreign companies, which previously had planned to buy olive oils, are now turning to Tunisia and Syria as suppliers,” said Mustafa Kürlek, the board chair of Köklü Zeytincilik, which sells olives and olive oil, calling on authorities to end the ban earlier.
The three-month ban was introduced in August.
“Türkiye will enter the new season with 80,000 tons of olive oil in stock. On top of that, we will have olive oil to be produced during the new season.”
Kürlek, however, warned if the weather remains hot in the 2023-2024 season, production may decline by 20 percent.
Türkiye’s export ban has a significant impact on global oil prices, according to Kyle Holland, an analyst at Mintec.
“There are concerns that the EU’s olive oil production may plunge compared to the 5-year average. The market may contract, which could lead to an increase in olive oil prices in the short-term.”
The high prices have not dissuaded consumers from buying olive oil, which makes having enough supplies even more critical, Holland said.