Olive Oil boom driving Turkey and Jordan production
There’s a revolution taking place in the eastern Mediterranean and it’s all about oil… olive oil.
A decade after planting tens of millions of trees, Turkey expects next year to become the world’s second largest producer of olive oil, surpassing Italy, Greece, Tunisia and Syria, and cater to the growing market in the Far East.
“We have increased the number of trees in past 10 years from 90 million to about double that and so we are expecting an increase in production and in the very near future to be the number one producer of table olives and number two producer of olive oil in the world,” Metin Olken, Chairman of the Turkish Olive and Olive Oil Publicity Committee, told The Media Line.
According to Olken, Turkey produced 160,000 tons of olive oil in 2010 and expects a crop of 200,000 tons this year. Within two years it expects to surpass the half-million mark and by 2015, 700,000 tons. While becoming the prince of olive production, Turkey still falls well behind the king – Spain — which makes 1.2 million tons, or over half of the world’s olive oil.
“We will take over from Greece, Italy, Tunisia and Syria,” Olken said.
According to the International Olive Oil Council (IOOC), Italy produced 480,000 tons, Greece 336,000, Syria 193,000 and Tunisia 120,000 last year. About 95 percent of the world’s olive trees are in the Mediterranean region. Olive oil is so well liked here that according to the UNCTAD, Mediterranean basin countries also account for 77 percent of the world’s consumption.
Italy and Spain have long ago branded themselves as supreme olive oil producers and have virtually cornered the market in North America and Europe. Olken told The Media Line that Italy and Spain supplement their brand by repackaging oil from Turkey, Greece and Tunisia.
Olive oil consumption has dramatically risen over the past decade – largely due to the popularity of the “Mediterranean diet.” World olive oil consumption will reach 2.98 million tons, with a 3.65 % increase from 2009. New markets have also opened up as the world became aware of the health benefits of the one of nature’s oldest commodities.
Turkey made the strategic move into higher olive oil production during the height of negotiations to enter the European Union as a way to gain EU agriculture subsidies. Those talks have floundered, but the trees have matured, needing at least seven years to begin producing marketable quantities of fruit. Olken said the government helped boost production of olives by offering financial incentives and subsidies to help cover the cost of planting and cultivation in initial years. Hundreds of thousands of people earn their livelihood from the olive oil industry.
European Union members like Spain, Italy and Greece have a virtual monopoly in the lucrative European market since they not only subsidize their farmers, but also impose heavy duties on imports.
“In the United States or Canada we would have to try and take a share from the Italians and Spanish, but if we go to China and India, these countries are only now starting to know what olive oil is and we don’t have strong competition from the Italians or Spanish yet,” Olken said.
This is one of the main reasons that Jordan, the world’s eighth largest olive oil producer, has decided to reach out to the Far East as well. They are pushing for quality branding over quantity.
“There is no way we can compete with the Italian and Spanish oils. Even the Turks have huge tracts of land and much water. The olive oil production in Jordan is very expensive due to the high cost of water. But our oil is very good,” Ruba Dagmish, the director of the Jordan Olive Products Exporters Association (JOPEA), told The Media Line.
Dagmish said they saw opportunities in Japan because they are willing to pay higher prices for quality olive oil and Indonesia because as a Muslim country they are able to get Hallal certification (religious approval of foods deemed “fit” by Islamic law).
Jordan produced some 24,000 tons of olive oil last year. Only about 30 percent of its olive oil is exported, with the bulk kept for local consumption. Despite the lack of water, olive trees cover around 75 percent of agricultural land in the kingdom.
“We are packaging it in fancy bottles and going for branding Jordanian oil as high quality extra virgin oil. We also export to the Gulf countries,” Dagmish said. “|But it is hard to compete in the Arab countries because they are bringing in cheaper Italian and Spanish oils.”