A key export Chokri Bayoudh, CEO, Office Nationale de l’Huile d’Olive, on reinforcing Tunisia’s global recognition as a major olive oil producer

 

THE REPORT Tunisia 2018Bloomberg Terminal Research Homepage: Oxford Business Group  

How can Tunisia secure its global positioning as the second-largest exporter of olive oil?

BAYOUDH: To date, Tunisia has been the second-largest olive oil producer in the world after the EU, and represents 8% of the global production of olive oil. Tunisian olive oil also represents between 20-25% of global olive oil exploitation. Furthermore, we expect the 2017-18 olive oil season to surpass 185,000 tonnes, which already exceeds the annual production average of the past 10 years. In fact, the current season is expected to produce between 260,000 and 280,000 tonnes of olive oil, which will potentially move Tunisia up to first place in the ranking of global olive oil exporters. In order to increase Tunisia’s global competitiveness as an olive oil producer, we need to invest in improving local efficiencies in terms of yield per hectare (ha), to keep up with other leading olive oil producing countries such as Spain, Italy and Greece. The new investment code prioritises the olive oil sector and investment grants can now reach up to 50%, which will facilitate the financing of new technologies that optimise production. Many producers have also implemented advanced irrigation systems, as well as a two-phase extraction system for both greater production stability and production quality. In order to further stabilise production we need to continue expanding our olive oil output, particularly in the north of the country where weather conditions are most favourable. We have already expanded olive oil production in this region by 10,000 ha since 2014, and we ultimately expect to increase plantations by 50,000 ha in total. Lastly, Tunisia needs to reinforce its packaged olive oil exportations. Tunisian olive oil is currently exported in large quantities to Italy and Spain where it is bottled and sold as Italian and Spanish oil. Tunisia only bottles 10% of the olive oil it exports. We need to invest in local packaging capacity to increase the 

global recognition of Tunisian olive oil and thus sell more Tunisian brands to international markets. 

What markets offer the most potential for Tunisian olive oil exports?

BAYOUDH: Tunisia exports two-thirds of the olive oil it produces to 54 markets around the world. However, in the coming years we are looking to reinforce olive oil exports to markets beyond the EU. In particular, Japan, Russia, India, sub-Saharan Africa and the Middle East offer opportunities for olive oil exports. Furthermore, the US is the number-one olive oil importer in the world and thus offers enormous potential. Although Tunisian olive oil exports to the US increases by 8-10% per year, we expect the growth rate to increase more in the coming years. By 2020 we expect to export 50,000 tonnes to the North American market. In particular, as a result of the increased global demand in organic olive oil, we project packaged olive oil to have enormous potential in the global market. We currently produce 60,000 tonnes per year of organic olive oil, and our goal is to make Tunisia the number-one producer and exporter in this segment in the years to come. Besides olive oil, we also want to improve the commercialisation of other olive oil products, such as soaps, creams and cosmetics. 

What role do you expect olive oil exports to play in reducing Tunisia’s budget deficit?

BAYOUDH: Agriculture is one of the pillars of the Tunisian economy, and represents 9% of GDP and total exports. Olive oil represents between 40-50% of the total agro-industry exports in Tunisia, thus this segment plays a key role in improving the trade balance and bringing in foreign currency to the country. In fact, income from oil exports exceeds TD2bn (€767.9m), which is significant for the Tunisian economy, as it is currently undergoing difficulties.