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DIRECT SHIPMENTS FROM THE MILL

When adding olive oil from different groves, you will receive your oils separately and the shipping costs corresponding to each of them will be added.

“Olive oil is gold”: the drought in Europe triggers demand in the Middle East

Middle Eastern producers ‘swimming in olive oil’ smell opportunity as harvests in Europe shrink due to the heat wave. Therefore, the Middle East has a new product in high demand: olive oil.

In Tunisia, the price per kilo of extra virgin olive oil has increased more than 100% compared to last year, and in Turkey The demand for wholesale olive oil is so high that the government has just introduced a tax of $0.20 for every kilo exported abroad.

The market is so tight that even small producers like Lebanon are experiencing unprecedented demand for their oil. Last month, a Spanish company landed in the crisis-hit Mediterranean country and bought up all local wholesale supplies, raising fears of shortages for Lebanese-branded exports.

“If I had a large order from the United States or Europe today, I would not be able to fulfill it. The Spanish diverted olive oil from Lebanon,” Christian Kamel, Fair Trade project director in Lebanon, tells Middle East Eye.

The increased temperatures in southern Europe are causing prices to skyrocket. Spain, where half of the world’s olive oil is produced, is suffering from a serious drought. It only produced 620,000 tonnes during the 2022-2023 harvest, compared to 1.5 million tonnes in normal times.

Tunisia sells 90% of its olive oil

European producers have already turned to Tunisia, the largest olive oil producer in the Arab world, to fill the empty. Thus, Tunisia sells 90% of its olive oil wholesale to heavyweights such as Spain and Italy. It is mixed with other oils and marketed abroad with Spanish or Italian labels.

Yields in the 2022-2023 crop were low by historical standards, but the tight market is supporting export earnings, which increased almost 37%. Exports are expected to increase 30% to 200,000 metric tons for the 2023-2024 fall harvest, up from 155,000 metric tons last year.

“Tunisian [olive] varieties are more resistant to drought compared to Spanish ones,” Fahd Ben Ameur, marketing manager of the Tunisian exporter, told MEE of Bulla Regia olive oil.

But as Europe suffers an unprecedented heat wave and the autumn harvest approaches, there are fears of a global olive oil shortage. “By October and November, we could see a total shortage of Spanish olive oil. That’s why these companies are going elsewhere in the region. They look for olive oil anywhere…” says Kyle Holland, oilseed and vegetable oil specialist at Mintec, a food market data analysis company.

Lebanese olive oil

“The drop in production in Spain has opened many opportunities for other players,” he adds. And the dependence on Lebanon for wholesale supply shows how desperate the situation is. In Lebanon for wholesale supply shows how desperate the situation is. Olive groves make up around 23% of Lebanese agricultural land, but unlike Tunisia, production tends to come from smaller family olive groves. In 2021-2022, Lebanon produced only 15,000 metric tons of olive oil.

But the Lebanese harvest has not been affected by the drought that is affecting the rest of the Mediterranean. “The species we have in Lebanon is very resilient and adapted to climate change,” says Assaad Saadeh, a fourth-generation producer who runs Maison Mazak in Shabtine. The latter began exporting his family’s olive oil three years ago and now the United Arab Emirates is his main outlet.

Lebanon is in the midst of an economic collapse and its currency has lost 95% of its value against the dollar. The country suffers blackouts and its infrastructure collapses, and the crisis has increased bottling and production prices, says Assaad Saadeh, but it has an advantage: “Europe must irrigate, not us.”

Lebanon belongs toa region known as the Levant, or Bilad al-Cham in Arabic, which includes Syria, Jordan, Palestine and Israel. Syrian olive oil was the fourth largest in the world before the civil war and part of its harvest (Syria produced 143,000 metric tons of olive oil in 2020-2021) is still sold in Turkey, regional producers report.< /p>

But few other Arab countries in the Levant have managed to break into exports to developed markets, despite producing olive oil for thousands of years. Most farms are family owned and do not have the economies of scale to compete with Tunisia or Spain. Furthermore, they also have no desire to compete with Greece or Italy.

Turkish olive oil

The same goes for olive oil exporters in Turkey, who enjoyed a record harvest last year, with oil production exceeding the estimated 420,000 metric tons. “When I ship my olive oil abroad, I know that I have to put my product at a more competitive price on the shelves. My margins remain below Greece or Italy,” says Duygu Özerson Elakdar, owner of 60,000 olive trees in İzmir province.

The price of a kilo of Turkish olive oil has more than doubled since the beginning of the year, reaching July prices of 185 Turkish lira per kilo (about 6.25 euros) , specifies the producer.

Jordanian olive oil

The price increase comes at the perfect time for Jordanian producers: a consortium of four major farms, one of which belongs to King Abdullah II, plans to launch a private label in the United States.

Jordan’s average production is small, around 25,000 metric tons per year, and is mainly consumed in the domestic market. According to Khodari, the consortium, which has already received advance orders for 50,000 bottles for next year’s harvest, intends to sell the surplus, or between 3,000 and 5,000 tons, in the West.

“Jordanian olive oil is very expensive but it is top quality. So there is no doubt that the lower quantities in Europe are an advantage for Jordan. It’s great for us because we aim for the top of the range. Sometimes Allah just smiles at you.”

Nidal Samain, owner of Aljood farms in Jordan and one of the region’s leading olive oil experts, believes the Jordanian olive oil sector is well positioned to bet on climate change. The country is one of the countries with the greatest water scarcity in the world.

The local olive tree, the Nabali, is “perfect in times of drought. It thrives in the desert,” he told MEE. “The best olive oil in Jordan is produced in the desert with no water supply.” “The best olive oil in Jordan is produced in the desert with no water supply.”

Any increase in olive oil exports would be good for countries whose economies are in very bad shape. Jordan faces stratospheric unemployment and survives thanks to American aid. Turkey, for its part, faces a monetary crisis and inflation close to 40%.

“We are suffering from hyperinflation, so Turkish olive oil is generally cheap compared to other producers,” says Duygu Özerson Elakdar. “But we are not seeing big gains in our commercial margins. Producers are struggling to keep up with the devaluation of the pound.”

The Turkish government is also looking to increase its income and encourage brand exports in this buying frenzy. For this reason, he argues that the new tax on wholesale olive oil exports, adding that he wants to boost foreign sales of his brand in this tight market.

Source: middleeasteye.net/fr/actu-et-enquetes/economie-huile-olive-changement-climatique-secheresse-europe

 

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