EU-MED Agpol Annual Meeting 15-16 Mars Paris TUNISIAN OLIVE OIL PRODUCTION AND EXPORT POTENTIAL Expert survey Dr. Boubaker KARRAY bkarray@yahoo.fr Paris 15 mars 2007

Plan Evolution of the olive oil sector in Tunisia during (1991-2005) European olive oil imports coming from the third countries: evolution and policy reforms (CMO 2004) Olive oil production and export potential to EU market (2010 and 2015) * Scenarios (partial and total liberalization) * Experts panel * Results Conclusion

Dynamics of Tunisian Olive oil sector since 1991 Total olive tree area : 1667 ha (2nd position after Spain) Olive Tree number: 64 millions (7th position after Spain, Italy, Greece, Turkey, Morocco and Syria) 1991-95 1996-00 2001-05 Production (Thousand tons) 151 184 142 +/- % of world Production 7,3 6,8 4,4 - Export (Thousand tons) 136,7 112,5 93 % of world Export 19,3 12,5 7,8 Export/Product (%) 87 61 65,5 Export to EU (Thousand tons) 117 97 83 % of Total export 86 89 + % of Total EU import 25 15 10 % of Extra EU import 91 72 60 Share in EU market Share in USA market 17,2 1.8 12,1 1 8,8 2.6

EU olive oil import (1991-2005)

EU olive oil import coming from third countries (1991-2005)

EU olive oil import coming from member countries (1991-2005)

Modification of exchange regime with the third countries EU Policy Reforms in the olive oil sector Modification of exchange regime with the third countries Exchange regime with the third countries Association Agreement 1995 Common Organization Market Of olive oil and table olives 2004 (CMO) WTO agricultural agreement 1995 Olive oil international Agreement 2005 (IOOC) PD PVD Fixed customs duties 20% (36%) (24%) Internal support 20% 13% Exportations subsidy Values 36% 24% Quantities 21% 14%

EU Exchange regime with the third countries Preferential tariff And Quota 56.700 tons Free from customs duties Normal regime MFN tariffs Extra virgin olive oil (1245 E/t) Lamp olive oil(1226E/t) Refined olive oil(1346E/t) Inward- processing This regime allows the European industrialists to import olive oil from the third countries, free from customs duties, but under the condition of exporting, outside the EU, an equivalent quantity

Preferential Tariffs granted to Tunisia: case of Lamp olive oil Adh. Greece Adh. Spain +Portugal Quota 57.167 MT GATT Quota 56 MT Quota 46 MT

Quota granted to other third countries Code NC Quota (ton) Date of application Lebanon 150910 15100010 1000 2003 Palestine 2000 2005 Tunisia 15091010 15091090 (56700) 57167 2004 Algeria 1509 1510 Morocco 151000 3500 Turkey In progress Syria Jordan 2000 (2006) 12000 (2010) 2006----2010

Equivalent tariffs 1995 (Euros/T) Source: European commission MFN tariffs (Normal regime) Olive oil Equivalent tariffs 1995 (Euros/T) MFN tariffs 2000 (Euros/T) Alert price (Euros/T) Virgin lamp 1532 1226 1361 Extra Virgin 1556 1245 1682 Refined 1346 1101 Source: European commission

Inward- processing regime Source: European commission During the period 1992-00, 88.700 thousand tons were imported from the third countries in inward-processing arrangements (65% of total import from these countries). Source: European commission

Storage price (Euros/ton) Source: EC Regulation n°865/2004 CMO 2004 (regulation 865/2004) Article 11 * If the market price of olive oil in the community exceeds the prices listed in the table, within a period of at least three months, and in order to assure an appropriate supply in olive oil to the common market through imports from non-member countries, it may be decided: Storage price (Euros/ton) Common market price (Euros/ton) Extra virgin 1779 (1779*1.6) = 2846.4 Virgin 1710 (1710*1.6) = 2736 Lamp 1524 (1524*1.6) = 2438.4 Source: EC Regulation n°865/2004

1. To suspend totally or partially the application of MFN tariffs to olive oil, and establish the detailed arrangements for such suspension 2. To open up a quota for olive oil importation, to which apply common reduced MFN tariffs, and define modes of management of this quota. Article 13 * For the proper functioning of the common organization of olive oil and table olives markets, it could be decided 3. To exclude totally or partially the recourse to the inward-processing arrangements

3. MFN tariff: normal regime Extra virgin Lamp Refined 1 + 2 + 3 Scenarios Scenario 1: PARTIAL LIBERALIZATION 1. Quota 86 tons 2. Inward-processing MAINTAINED 3. MFN tariff: normal regime Reduction Extra virgin 1245 E/t – 20% Lamp 1226 E/t – 20% Refined 1346 E/t – 20% 1 + 2 + 3 Scenario 2: TOTAL LIBERALIZATION

Experts panel for the 1st and 2sd rounds of the DELPHI study 1st round 2sd round   consulted experts returned enquiry % Transformation 1 100 Administration (Technical service) 7 6 85,71 Research 4 3 75 Export 2 66,67 Transformation + Export 5 60 50 Production + Transformation + Export Certification body Total 23 18 78,3 24 19 79,2

Results

OLIVE OIL PRODUCTION POTENTIAL 2001-05 2010 2015 Olive oil production 142 190 250 Increasing plantations yields through the application of good agricultural practices 1 An integrated olive growing strategy strongly based on scientific arguments, clear objectives, and mobilizing adequate human and material means 2 Extending areas of irrigated oil olives 3 Reinforcing financial availabilities for the benefit of the sector, and granting direct aid to producers 4 Restructuring old plantations through uprooting and replanting, while increasing densities 5 Extending areas of oil olives in dry conditions while increasing densities 6 Promoting hyper-intensive plantations 7 Encouraging the selection of Tunisian varieties in intensive plantations 8

OLIVE OIL EXPORT POTENTIAL 83.5 186 224 1.Quota 56.7 01-05 2010 2015 Scenario 1: PARTIAL LIBERALIZATION 83.5 186 224 1.Quota With increasing J, F and M quantities Without increasing J, F and M quantities 56.7 85 83 84 2.Inward-processing If suspended 0 Euros 46.8 100 50 130 65 3.MFN tariff: normal regime 12 18 Scenario 2: TOTAL LIBERALIZATION 153 206

Syntheses Olive oil production 142 190 250 Olive oil export 140 37 237 2001-05 2010 2015 Olive oil production 142 190 250 Olive oil export Scenario 1: PARTIAL LIBERALIZATION 83.5 186 224 Scenario 2: TOTAL LIBERALIZATION 153 206 Total EU import coming from third countries (average) Min Max 140 37 237 -

Conclusions * The effects of the total liberalization of exchanges are inferior to those of partial liberalization, as far as the increase of the Tunisian exportations in olive oil to the European market is concerned. * Total liberalization will bring about a more important competition between third countries producers and exporters of olive oil (Tunisia, Syria, Turkey, Jordan, Algeria, Lebanon and Palestine)

Research perspectives We should reproduce the same study for the author third countries (FP 7) (Syria, Morocco, Turkey, Jordan, Algeria, the Lebanon, and Palestine)

Thank You for your attention