W50 Olive & Olive Oil Update: Tunisia Allocates for Domestic Sales, Morocco Implements Export Ban, and Spain Maintains Production Stability

Tunisia Balancing Domestic and Export Markets and Tax Policies for a Sustainable 2023/2024 Campaign

In W50, the Tunisian Ministries of Agriculture and Commerce announced a strategic initiative to allocate 10.5 thousand metric tons (mt) of extra virgin olive oil for retail sale to domestic consumers at a preferential price of USD 4.84 per liter starting December 15. This move aims to address domestic demand and enhance transparency in olive oil labeling. Known for exporting a significant portion of its olive oil, the country plans to allocate part of the harvest for local consumption. The production expectation for the 2023/2024 olive campaign is optimistic, projecting an 11% year-on-year (YoY) increase, with an expected output of 200 thousand tons of olive oil. Additionally, the Tunisian government has introduced a new tax policy for olive oil exports in 2024, in which half of the declared revenue for unpackaged olive oil exports will be subject to a 2% tariff, and unpackaged crude olive oil and pomace oil exports will be subject to a 4%, incorporating tariffs on unpackaged olive oil exports to optimize revenue and potentially implementing border closures based on sector needs and domestic consumption requirements.

Olive oil production in Tunisia for the 2022/2023 campaign amounted to 180 thousand mt, compared to 240 thousand tons for the 2021/2022 campaign, indicating a 25% YoY decline. Exports accounted for 47% of Tunisian agricultural exports and 51% of food exports during the 2022/2023 season. The total exported volume was 176 thousand mt, valued at about USD 960 million. This includes 17.6 thousand mt of packaged olive oil amounting to USD 118.5 million and 53 thousand mt of organic olive oil valued at USD 313 million. Notably, extra virgin olive oil constituted 89% of the overall export volume.

Actionable Recommendations for Tunisian Olive & Olive Oil Market

Buyers should assess the impact of the tax policy on export pricing and competitiveness, identifying potential shifts in market dynamics for opportunities. Hedge against currency fluctuations, regulatory changes, and tariff-related uncertainties by diversifying investment portfolios for risk mitigation.

Spain's Robust Production in 2023/2024 and Morocco's Export Ban Impact on Global Prices

In Nov-23, Spain produced 221 thousand mt of olive oil, contributing 259 thousand mt for the 2023/2024 campaign. The region of Andalusia’s production reached 35 thousand mt. As of the end of Nov-23, total Spanish olive oil stocks amounted to 372.8 thousand mt, distributed among mills (229.6 thousand mt), packing houses (141 thousand mt), and community stocks (2.1 thousand mt).

Morocco's Ministry of Agriculture has approved a decree to ban on olive oil exports, aligning with similar measures taken by Türkiye in Aug-23. Influenced by soaring olive oil prices, the decision positions Morocco as the third major olive oil-producing nation to enforce export restrictions. In the W50 period, the retail price for one liter of olive oil in Morocco ranged from USD 12.05 to USD 15.34, reflecting a significant 64% increase compared to the average price in Aug-22.

The objective of this regulation is to safeguard the purchasing power of Moroccan consumers. Despite a challenging harvest in 2022 due to drought, Morocco remains as Africa's second-largest olive oil producer and exporter, following Tunisia. In the 2022/23 campaign, the country produced 156 thousand mt of olive oil and exported 28 thousand mt. Officials in the agriculture ministry attribute the surge in olive oil prices to shortages across the Mediterranean, driven by the lowest global production levels since the 2016/17 crop year. Morocco's export ban may contribute to additional price hikes in olive oil demanding markets, particularly in Europe. Spain, a significant importer, received about 3% of its total olive oil imports from Morocco in the first seven months of 2023, while Türkiye and Syria accounted for 11% and 2.5%, respectively, during the same period. With Morocco's export ban, combined restrictions are expected to further constrain supply, maintaining upward pressure on olive oil prices that are already near record levels.

Actionable Recommendations for Spanish Olive and Olive Oil Market

Buyers can Invest in Spanish olive and olive oil, anticipating a positive impact on global supply and potential pricing stability for opportunities. Diversify investments across multiple commodities and stay informed about international trade policies that could impact the olive oil market. Stay informed about geopolitical risks and trade regulations that could affect Spain's olive oil exports for risk mitigation