Why did olive oil prices in Turkey increase due to the drought in the world?

While drought-affected world olive oil prices hit new record highs one after another, this price surge also spilled over into Turkey.

The increase in the costs of farmers due to the drought and the inflation that is experienced in the world, especially in the countries of southern Europe, led the price of a liter of olive oil from 5.4 euros in April to a new record from 7.5 euros in mid-July.

Olive oil prices also shot up in the domestic market, as problems experienced in world production increased demand from Turkey, as well as reflecting higher domestic exchange rates in costs.

Providing information to sozcu.com.tr on the subject, the President of the National Olive and Olive Oil Council (UZZK) Dr. Mustafa Tan pointed to the ‘increase in exports’ and the ‘increase in costs due to the effect of exchange rate’ due to the increase in olive oil prices in the national market.

Food Retailers Association board member Erdal Tüfekçi said the retail price of a liter of olive oil rose from 90 lira to 160 lira in just two months, increasing by 77.7 percent.

CAN OF EXTRA OLIVE OIL 5 LT UP TO 1000 TL

According to Tüfekçi, the demand for large packaged products decreased due to the level of olive oil prices, and products such as 500 ml and 750 ml, which appeal to the purchasing power of citizens, began to become more popular.

Stating that the olive oil currently being sold is the product of the last production season and that the current supply is limited, Tüfekçi said, “A 5-liter can of olive oil has reached the level of 1000 TL. That is why 3-liter cans have become cheaper, ”he said.

Looking at price changes in various markets, it is noted that the prices of 5 liter cans of olive oil have risen to the level of 1000 lira.

While the price of a 5 liter can of extra virgin olive oil produced by a brand known throughout the country was 450 TL in January, it increased to 838 TL in mid-July; It is seen that the product of another brand, which was sold around 630 TL in January, reached 1015 TL.

INCREASE IN EXPORTS AND AFFECTED CURRENCY

Speaking to Sozcu.com.tr, the President of the National Olive and Olive Oil Council (UZZK) Dr. Mustafa Tan On the other hand, he pointed to the “increase in exports” due to the increase in the prices of olive oil in the national market and the “increase in costs due to the exchange rate.”

Explaining that demand from Turkey has increased due to the problems experienced in the world supply of olive oil, Dr. Tan stated that exports were made at record levels this year, and this was reflected in prices on the domestic market. .

“On the other hand, as the exchange rate goes up, olive oil automatically goes up,” Tan said, adding that with the effect of the increase in the exchange rate, both packaging costs have increased as well as shipping costs. transportation due to increases. in fuel; He said this added to prices as further increases inevitably.

List the costs that increase the price of crude olive oil such as ‘the cost of the can, the pressure on the can, the cost of filtering the pulp to extract the pulp, the cost of transportation, the purchase-sale tax and the profit sharing of the retailer when it comes to the shelf’, Dr. Tan, “Considering the costs, a liter of real quality extra virgin olive oil does not save its own cost less than 200-250 TL”, said.

However, stating that the image of ‘olive oil is expensive’ is not true and that a kilo of olives is cheaper than a kilo of cheese, Tan said: “Despite these costs, the olive sector and olive oil is not opportunistic, it is trying to stay afloat”.

CONCERN ‘IF PRODUCTION INCREASES IN EUROPE’

Informing that the harvest will begin in October for the new production season, Dr. Tan stated that they will start working on the yield estimate in September.

Noting that Turkey is an advantageous country in the production of olives and olive oil, and that it is one of the countries that has suffered the least damage from global climate change this year, Tan pointed out that the wind can be reversed with the reduction of the effects of drought that is effective in Europe.

Tan expressed his concern about the situation as follows: “There is famine in Spain and Italy, but if production increases in these countries, we may live in difficult times. In other words, if prices there fall due to increased production, our producer may suffer. Because our cost is high. But that’s just a possibility right now.”

EXPORTS IN THE FIRST 6 MONTHS EXCEED ALL OF 2020

So how was the ‘record export’ noted by Tan reflected in the official data?

Looking at the data from the Turkish Exporters Assembly (TIM), it is seen that the exports of olives and olive oil in the first 6 months of this year exceeded the exports of olives and olive oil in the whole of last year.

Consequently, Turkey’s olive and olive oil exports increased by 190 percent in the January-June 2023 period compared to the same period a year earlier, reaching $559.8 million.

In the whole of last year (January-December 2023), total exports of olives and olive oil were 495 million 838 thousand dollars.

EXPORTS TO SPAIN INCREASE 26.8 TIMES

In the first 6 months of this year, the country to which most exports were made was Spain, which was affected by the drought.

to Spain In the period January-June 2022 Türkiye, which exports $7.6 million worth of olives and olive oil2023 Period January-June increased its exports to 203.9 million dollars.

in the same period Exports to Italy, on the other hand, shot up from 1.2 million dollars to 30 million dollars.

Talking to Sozcu.com.tr Faruk Güzeldere, Chairman of the Board of Istanbul Food and Necessary Retailers Association (Istanbul PERDER)He suggested imposing restrictions on exports to avoid price increases in the domestic market for olive oil.

The price of olive oil, which broke records in Spain due to the drought, had become one of the main items on the country’s agenda ahead of the elections to be held next week.

The Financial Times reported that olive oil, which in September exceeded 4 euros (116 TL) per kilogram, rose to 7 euros (205 TL) due to rising temperatures and lack of rainfall in Spain, the world’s largest producer. , as well as Italy and Portugal. ) wrote that he was in it.