Turkey Lifts Ban on Bulk Olive Oil Exports

Turkey’s olive oil producers are preparing to ramp up exports to the United States, Japan and Australia following the complete lifting of bulk olive oil export restrictions.

They aim to compete with European producers on quality and price while making significant gains in other key markets, including Saudi Arabia, the United Arab Emirates, China and Japan, where demand is increasing.

By 2025, Turkey plans to enhance its presence in these regions through targeted marketing and trade partnerships.

The ban was lifted 13 months after the Turkish government suspended bulk olive oil exports to stabilize domestic prices and encourage the export of individually packaged olive oil, which commands higher prices than bulk olive oil.

“The restriction on olive oil exports in Turkey was done to prevent prices from rising in the domestic market,” said Mustafa Tan, president of the National Olive and Olive Oil Council. “However, since prices in the domestic market are related to world prices, this effect was not seen much.”

In June, after intense lobbying by producers and exporters, the government eased the ban, allowing 50,000 metric tons to be exported until November.

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“The sector constantly asked for the export restriction to be lifted,” Tan said. “Therefore, our sector is satisfied with the decision taken. With the lifting of export restrictions on olive oil, sector representatives started to see the way ahead. The lifting of export restrictions on olive oil will move the sector higher.”

Turkish olive oil producers face the opposite challenge, with excessive inventory levels after several years of robust harvests and some difficulties exporting individually packaged olive oil.

“Turkey’s olive oil exports are predominantly confined to bulk sales,” said Serkan Yasser, an export specialist. “Before the ban, there was concern regarding a potential supply shortage for the domestic market. However, our current challenge is the accumulation of excessive olive oil stocks.”

According to Mehmet Emre Uygun, chairman of the Aegean Olive and Olive Oil Exporters’ Association (EZZIB), Turkey had about 150,000 tons of olive oil stocks heading into the start of the crop year.

Observers expect Turkey to produce about 350,000 tons of olive oil in the 2024/25 crop year. With domestic consumption of around 120,000 tons per annum, Emre Uygun and other Turkish producers and officials worry they will have too much olive oil that will not be exported before it loses quality.

Some supply chain experts expect that Turkish producers could immediately fill the void left by two years of below-average harvests in much of the Mediterranean. Spain and Italy will have virtually no olive oil stocks until the harvest peaks in November and December.

“As Europe grapples with production challenges, Turkey has emerged as a formidable competitor,” said Sean Zacot, president and chief executive of supply chain advisory Boss Global Strategy.

The country’s favorable climate, competitive pricing and strategic initiatives have helped it gain market share.

“Spain is currently facing production challenges attributed to drought and climate change, resulting in significant supply gaps within the global olive oil market,” Zacot said.

“In response, Turkey has successfully increased its production capacity and is offering olive oil at competitive prices,” he added. “This development has led to a heightened demand for Turkish olive oil in key markets, particularly within the European Union, where Spain has historically held a dominant position.”

According to Zacot, the recent depreciation of the Turkish lira makes exports far more competitive than those of European competitors.

“This pricing advantage, coupled with the high quality of Turkish olive oil, has enabled Turkey to attract new buyers and expand its market share,” he said. “Projections indicate that by 2025, Turkey will continue to capitalize on its cost competitiveness to enhance its export capabilities further.”

“This situation has enabled Turkish producers to successfully enter price-sensitive markets in Asia, Africa and Latin America,” he added.

Significant government investment, the introduction of new agronomic practices and the construction of modern mills have improved the quality of Turkish olive oil, allowing producers to shift from focusing on bulk to individually packaged exports.

“There is a particular emphasis on organic and sustainably produced olive oil, which aligns with global consumer trends,” Zacot said. “Traditionally, Turkey has been recognized as an exporter of bulk olive oil; however, there is a notable shift towards establishing robust domestic brands. Companies increasingly invest in branding, packaging and marketing strategies to position Turkish olive oil as a premium product.”

However, many producers in the country remain reliant on exporting in bulk to the world’s largest bottlers. Indeed, some have seen calls for lifting the export ban as a tacit admission that individually bottled exports did not work as well as the government had hoped.

Still, as olive oil production quantity and quality continue to rise, Turkish officials and producers anticipate an increasing role for the country in the global olive oil market.

“Turkey’s olive oil exports experienced a remarkable increase of over 80 percent during the 2022/23 crop year, effectively addressing the supply deficiencies resulting from shortfalls in European production,” Zacot said.

“The establishment of new olive groves, coupled with investments in advanced processing facilities, positions Turkey for further enhancement of its production capacity,” he added. “By 2025, Turkey aspires to achieve annual olive oil exports exceeding 130,000 tons.”

He indicated that exporting to the United States and Canada is at the top of many producers’ minds, where willingness-to-pay is higher than in other parts of the world, and demand is steadily rising.

“Turkish producers are progressively directing their efforts towards the North American market by utilizing e‑commerce platforms and direct-to-consumer sales channels,” Zacot said. “It is anticipated that by 2025, Turkey will enhance its exports to North America by emphasizing premium products and organic olive oil.”

However, the E.U. remains a crucial market for Turkish olive oil, representing a substantial share of its exports.

“In light of production challenges faced by Spain, Turkish olive oil has established a more prominent presence in Europe, especially in nations such as Italy, Germany and France,” Zacot said. “By 2025, Turkey intends to reinforce its standing in the E.U. by positioning its olive oil as a high-quality and cost-effective alternative.”

“By capitalizing on supply deficiencies in traditional markets, utilizing competitive pricing strategies, and marketing its olive oil as a premium product, Turkey is poised to reinforce its status as a prominent participant in the global olive oil industry,” he concluded.

Tags: export, olive oil, Turkey