Exports 240% up
At the end of July the Ministry of Trade issued an export ban for olive oil in bulk and barrels for the last three months of the season starting on 1 August through to 31 October. Before this Turkey had already exported a total of 136,500 mt of olive oil this season so far, a stunning 240% up on November 2021 to July 2022.
While the export ban was initially intended to curb domestic prices, it produced little effect as the timing was too late. The ban instead gave rise to uncertainty and loss in confidence in Turkey as a trading partner. Although the ban did help to prevent further price increases a bit, the impact is negligible as international prices are on the rise for olive oil.
Spain and Italy need to buy additional supplies
As the National Olive and Olive Oil Council of Turkey (UZZK) states extreme drought reduced olive output by more than 50% in the leading producing countries Spain, Italy and Tunesia last year. Italy and Spain accordingly increased imports from Turkey by 21- and 44-fold respectively to compensate for the shortfall. Turkey exported 100,000 mt or 75% of olive oil in bulk and the remaining volumes in different sized packages. Ministry of Trade data shows that exports of olive oil in bottles have only risen by 3%, whereas bulk shipments have surged by 536% and shipments in barrels by 394%. The upsurge in international demand has also driven up domestic prices in Turkey. While wholesale prices still ranged at TRY 90 per litre at the start of May, they have now more than doubled to TRY 180-200 per litre.
Low yields in Turkey
Harvesting is just about to start in in the forty provinces in Turkey where olives are grown. Adverse weather conditions driven by climate change have, however, impacted crop development this year. While heavy rains in spring and the dry weather in summer will reduce yields this year, it should also be noted that 2023 is an off-year in terms of production. Drought will, in addition, reduce production in Italy and Spain this year again.