Olive oil is still the leader for Tunisian agribusiness

Post-revolutionary instabilities, such as strikes, sit-ins and lost tourism revenue have affected Tunisia’s agribusiness less than other sectors. “This has probably been the most resilient sector since the revolution,” Lilia Kammoun, an analyst at Tunisie Valeurs, a local business management consultancy firm, told OBG. “I think it will continue to grow in 2016 due to its resilient nature and to Tunisians’ purchasing power, which seems to be stabilising due to rising wages in both public and private sector jobs.”

“As with all the sectors, it suffered a little, but we didn’t notice a reduction when it came to investments,” said Abderrahmane Chafii, CEO of Tunisia’s Agency for Agricultural Investment Promotion, which evaluates investment opportunities. “The curve kept going up.” According to Chafii, agricultural exports account for roughly 10% of exports and 16% of jobs.

Olive Oil

Agribusiness in Tunisia is dominated by olive oil, which currently represents 40% of Tunisia’s agricultural exports and 10% of total exports. Tunisia has 80m olive oil trees, and olive oil provides livelihoods for hundreds of thousands of Tunisians. While many European olive oil producers in Italy and Spain experienced a poor harvest in 2015, Tunisia enjoyed a record harvest. A bumper olive oil crop in 2015 delivered yields 400% higher compared to 2014, reaching an estimated 280,000 to 300,000 tonnes. The record crop coincided with a shortfall in international production, lifting prices and putting Tunisia in second place after Spain, the first time it held that position. However, because of sporadic rainfall, and because olive trees cannot produce a good crop two years in a row, 2016 exports will be lower. For these reasons, Tunisia’s government has been brainstorming means by which it could diversify its agribusiness sector.

Only a small percentage of Tunisia’s olive oil production, however, is consumed domestically, as cheaper vegetable oil is replacing olive oil in the Tunisian diet. Approximately 70% is exported to EU markets, mainly to Spain and Italy. There are also 60 other export markets worldwide, such as the US, Canada, France, Russia and China, under as many as 80 different brand names. Tunisian olive oil producers have identified creating a profile for Tunisian olive oil as an important goal moving forward. Currently, Tunisian olive oil is marketed under various brand names as it is not widely recognised on the international market. Tunisian olive oil faces stiff competition from traditional Spanish, Italian and Greek producers, which enjoy stronger name recognition in destination markets.

Increased Exports

The EU increased the annual olive oil quota from Tunisia by 50% to almost 82,000 tonnes in July 2015. The EU also removed monthly limits on imports that allowed local EU products to be marketed before large quantities of olive oil from Tunisia could be imported.

In June 2015 Tunisia’s Ministry of Industry, Energy and Mines, in cooperation with the UN Industrial Development Organisation, also organised a seminar to determine details surrounding the “Food Quality Label Tunisia.” This certification label aims to bring greater value to exports of Tunisian harissa – a hot red pepper paste that is becoming increasingly popular with chefs worldwide – and sardines.

Recently, Tunisia also expressed interest in developing a partnership with Brazil to bring Brazilian agricultural expertise to Tunisia via research and teaching schemes, especially focused on developing areas such as grain and wheat. Tunisia also wants to diversify its export market and promote products such as olive oil and dates in Brazil. Tunisia grows approximately 70% of what it needs and imports the remainder. Currently, agricultural products such as sugar, soy, maize, coffee, beef, tobacco and poultry are the main items exported from Brazil to Tunisia. On the other hand, the main product sold by Tunisia to the Brazilian market is fertilizer. Additionally, dates are listed in fifth place and olive oil is listed in 44th place for exports.

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The Report: Tunisia 2016

Industry & Mining chapter from The Report: Tunisia 2016

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