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May 17, 2010

Tunisia fights for share of olive oil market

by Sylvia Smith

Clambering up a ladder precariously balanced against an olive tree, Rajaa M'Barki is stripping olives from branches that are high up. Branches that are beyond her reach are brought down gently, by wielding a short-handled rake.

"We always hand-pick olives," she explains. "We never shake the tree to get the ripe olives to fall off."

Ms. M'Barki's whole extended family are working on this grove just outside Kairouan in Tunisia. The olives are being collected from beneath the tree by her younger brother.

Cheap labour costs mean that using machines to shake olives forcibly from trees - a method commonly used in Europe, but said to harm the eventual taste of oil - has not caught on Tunisia.

Yet, until recently, this north African country has been in the background of olive oil production, content to remain anonymous and to export oil in bulk to Spain, which is Europe's biggest producer, and to Italy, which in the mind of many consumers is the home of olive oil.

Now Tunisia is stepping up production, bottling and labelling its own oil, and launching a campaign to open up new markets. Compounding Tunisia's determination to export olive oil under its own country's flag are new European Union (EU) food regulations that require greater transparency when it comes to a produce's country of origin. All the oil exported is 100% Tunisian.

In addition, Tunisia benefits from a sunnier climate that ripens the olives more quickly, allowing them to be harvested a few months earlier than European competitors on the northern shores of the Mediterranean.
With 1.7 million hectares of olive trees, representing almost 20% of the olive tree orchards world-wide, Tunisa is the largest exporter of olive oil outside the EU.

Production of olive oil holds a strategic position in Tunisian agriculture, representing one third of all cultivable land on which 56 million olive trees stand.

Add to this the fact that Tunisia has increased production to about 200,000 tons, which represent approximately 5% of the total world production and a quarter of all internationally exchanged olive oil, and you have an important player on the international field.

Except that consumers have never heard of Tunisian olive oil. According to Lemia Thabet, of the Tunisia Technical Packaging Centre, the campaign to sell directly to niche markets will bring greater recognition.

"We face a big hurdle because of the grip Italy has on the market," she explains.
"But we can say that our bottled oil is 100% Tunisian and that counts for a lot in speciality shops. This is something Italy cannot always guarantee."

Ms. Thabet's experiments with different packaging and labels have focused on scenes from a traditional Mediterranean rather than a Muslim country.

But experts in the oil market such as Mounir Ouhrani of Slama Huiles in Tunis believes that this is only tinkering. Clearly labelled bottles are essential to clarify where oil comes from, he insists.

"Until recently EU law allowed foreign oil to be sold as Italian if it was cut with a small amount of domestic product," he says. "Only about 4% of olive oil leaving Italy is pure Italian oil."

Last year, there was a 45% rise in imports of Tunisian bulk olive oil into Italy.

In Tunisia, meanwhile, the number of companies exporting bottled olive oil has increased from 20 to 46 in the last two years.

The new campaign, which is targeting the United States and Europe, has been helped by the Tunisian government's strategy of zero-rating agricultural products for value added tax purposes. Additionally, there are no customs duties on exports, and other tax incentives are about to be announced.

But Mr. Ouhrani says the lack of Tunisian produced bottles is slowing progress.
"We buy almost all our bottles and stoppers from Italy and that pushes up the price," she says. "We should be making our own."

Getting the message across about oil seems to involve publicising the north African country itself.

"We've been producing olive oil since Roman times," Ms Thabet observes. "But we're known as a holiday destination rather than as an agricultural country. "We just need to get the message across that we can do several things extremely well."


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