Turkey’s Olive Output will Strengthen Turkish Olive Oil Prices in the Global Market

Published 2021년 12월 6일

Turkish olive farmers began their harvesting season a month ago, and they are already anticipating an exceptional season. According to official data from the Turkish Ministry of Agriculture and Forestry, for MY 2021/22, olive production is forecasted to increase by 32% from the previous MY to reach 1.7 MT. Subsequently, olive oil production is estimated to increase by 35% from the last MY, reaching 235.7K MT, which would be the country’s second-highest total. Continuous increases in olive trees plantation and a much more productive average yield have made Turkish farmers overcome adverse weather conditions worldwide. As a result, exports of Turkish olive oil are expected to strengthen its position in the international market.

Despite climate challenges at the beginning of the year, Turkish farmers were able to recover production with a surprising yield, which caused the harvest to be forecast with record numbers. Therefore, unlike other olive oil-producing countries, Turkey will substantially increase its olive oil production, which will be essential for Turkish olive prices to remain competitive compared to other Mediterranean countries.

Continuous Expansion of Olive Trees is Bearing Fruits

According to the National Olive and Olive Oil Council (UZZK), the number of olive trees in Turkey for the next MY will increase by 1.9% from the previous year to 192.3 million trees. Of all, 165 million bear fruit, and 28 million are at the level of saplings that have not yet produced fruit. By reaching this number of trees, Turkey will be increasing by 50% its planting olive trees in the last 15 years. According to the UZZK Council, there is no other region in the world with such rapid growth in olive trees than in Turkey.

Source: Tridge

It is also estimated that the average olive yield per tree will increase by 30%, from 8.3 kilograms to 10.56 kilograms. The increase in productivity will lead to a total olive production of 1.73M MT, a 32% increase from the previous year. It is also foreseen that 29% of the total olive production will be for table use, and 71% will be for oil. Therefore, table olive production will reach a record high of 506.8K MT, with a 40% increase from last year. Production will reach 235.7K MT for olive oil, a 35% increase, and the country’s second-highest total.

Turkish Farmers Resilience from Climate Change aims to Impact Prices

Despite weather challenges at the beginning of the year, such as droughts and wildfires, Turkish farmers were able to produce high-quality olives for the productive olive oil sector. Turkey has been less affected by global climate change phenomena compared to other producing countries such as Spain, Italy, and Greece, where a decrease in olive output is expected. Thus, for the olive oil sector in Turkey, it is essential to keep prices competitive in the global market in order to take advantage of the global situation and strengthen its international position.

According to Okan Idug, Trdige’s Engagement Manager in Turkey, the government is already taking measures to keep prices from being volatile for the next MY. “Turkish government announced the minimum domestic purchase price in order to protect the farmers for “olive suitable for oil” as USD 0.72 per KG as of October 2021. The announcement was made while also considering the competition with Spain by setting the prices of olive oil below 3 Euro per liter,” he informed. With the minimum domestic purchase, the government supports olive oil producers to remain competitive in the global market.

Source: Tridge

MY 2021/22 Outlook for Turkish Olive Oil

For Turkish olive oil to strengthen its position in the international marketplace, exporters expect prices to be more competitive than other Mediterranean countries. Therefore, if Turkey is able to keep prices stable for most of MY 2021/22, Turkish exports will be able to obtain more importance in some of the leading import markets. In 2020, Turkey exported the value of olive oil to USD 53M, which was a 10% fall from the previous year. For the next MY 2021/22, exporters are optimistic they will be able to recover.

As the harvest olive season began in Turkey, Melih Kolukirik, Tridge’s representative in Turkey, reported the season’s first prices. “Current prices are around USD 3.50, 0.8 acid ratio for 1 liter. With the start of the harvest in the Aegean region, it is expected that the market prices will go down a bit by the end of November, and then the prices will stabilize.” He mentioned that there would be more competitive offers from suppliers by December, which will be looking to offer prices at around USD 3 per liter.

With a stable price that is able to compete with the rest of the Mediterranean producing countries, Turkish olive oil will hold a significant advantage in the global market as demand for olive oils keeps increasing in major importing markets as the US, Italy, Saudi Arabia, and Japan, all of them, critical markets for Turkish olive oil today.

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