Olive oil may be overlooked as a commodity in the world economy, but for Tunisia it is the largest export earner and it provides livelihoods for hundreds of thousands of its people. The government has undertaken a concerted program to boost production and improve the earning potential of areas already under cultivation by improving irrigation and encouraging organic farming. These developments should help the sector surmount issues it faces such as trade limitations and an undeservedly shaky reputation in some countries.
Tunisia will produce 1.1 million tons of olives and 200,000 tons of oil from them in 2007-2008, the Tunisian agriculture ministry announced last December. This will make this year the fifth in a row that it has produced this amount, placing it as the world’s fourth largest producer of olive oil, after Italy, Spain and Greece. The government has set its sights on boosting production further, to ensure that other growing producers such as Turkey do not overtake it — and if possible to improve Tunisia’s ranking further.
As part of this policy, the government will encourage the planting of an additional 30,000 hectares of olive fields every year to boost oil production to at least 210,000 tons annually. Some 130,000 tons will be exported. As harvests have in the past been affected by droughts — production fell to 30,000 tons of oil in 2001-2002 and 70,000 in 2002-2003, the government is also increasing spending on irrigation.
Tunisia has around 56 million olive trees planted on 1.6 million hectares, a third of the country’s total cultivated area. The bulk of production is in the center of the country, where 52% of the country’s olives are grown, with smaller amounts from regions in the north (33%) and south (15%).
The economic and social importance of the olive oil industry cannot be overstated. Olive oil is the main source of income for more than 500,000 families from Tunisia’s population of 10 million, according to the Office National d’Huile; it accounts for around 50% of export revenues.
There is considerable scope for export growth, if some hurdles can be overcome. Despite its large output, Tunisia has a relatively low profile as an olive oil producer among consumers, as most of its overseas sales are in bulk, rather than through brands.
The European Union, which is a major importer of many Tunisian goods, currently limits the entire bloc’s purchases of Tunisian olive oil to an annual average of 50,000 tons a year, due to pressure from the EU’s own olive oil manufacturers. Competition from Turkey and Syria on the EU market also makes life tough for Tunisian exporters.
The sector has also received some negative publicity of late, with scandals involving the relabeling of Tunisian oil as local produce in Italy and Spain, doing little to improve their image abroad — even though Tunisian exporters themselves were not necessarily implicated.
Tunisia’s olive oil does have some competitive advantages. Most Tunisian olive growers use little or no chemical fertilizers and pesticides, so much output can be classified as organic, and giving access to a growing niche market and moving it up the value chain. So far 35,000 hectares have either been certified as producing organic olives or are actively in the process of acquiring this status. Additionally, the government is encouraging better promotion of Tunisia’s olive oil in growing markets, such as Asia and North America as well as Europe.
Tunsia’s Maghreb neighbor Morocco is also looking to develop its olive oil industry, boosting production and improving technology. Its oil production sector is in need of revitalization, and will not become as large as Tunisia’s — the government’s target is production of 30,000 tons of oil within the next few years — but could play an important role in the economy of some rural areas. Currently, some 500,000 hectares are cultivated for olive trees, and the government hopes to double this figure by 2010.
In September, the first, of a wave of 10 new 1000-hectare olive groves, was planted in the Beni Hellal region in west central Morocco. The project to develop new export-oriented farms has been launched by Oléa Capital, a joint venture between Crédit Agricole du Maroc and the Société Générale Asset Management.
Crédit Agricole president Tariq Sijilmassi has said that the fund will help bring a sector “in need of success stories” up to date and introduce “a modern financial framework.”
However, demand for olive oil continues to grow, so Oléa’s founders have seen the potential for exports from modern farms and plants in Morocco. Oléa hopes to lead the way in showing how Morocco’s olive oil production can develop and prosper.
