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http://www.chemnet.com   Apr 29,2015 Global Times
On a typical warm and sunny Mediterranean morning in late April, Narjes Maslah El Hammar, director of a food safety body under Tunisia's Ministry of Industry, Energy and Mining, proudly led a tour group of foreign visitors around an olive oil plantation near the country's northern coastline.

Italy, which is famous for its olive oil, is just about 150 kilometers away across the Mediterranean, and Tunisia enjoys similar climatic advantages.

Tunisia's olive oil sells for much lower prices, partly because the country's brands are not as well recognized as those of its EU rivals.

But thanks to a new strategy, Tunisia's olive oil exports are increasing rapidly, and revenue from the exports rose almost tenfold year-on-year in the first quarter of 2015. The country is hoping for further rapid expansion of the industry, and is now focusing on exports to China.

Moving into second

"Spain is the world's biggest producer of olive oil, followed by Italy, Greece and Tunisia, but this year Tunisia is expected to become the second-largest producer of olive oil, surpassing Italy and Greece," Abdessalem Loued, chairman of a trade association of olive oil exporters, told the Global Times in Tunisia.

According to the website of the Chinese embassy in Tunisia, a senior official in Tunisia's Ministry of Industry, Energy and Mining estimated in December 2014 that the country's olive oil output would reach 265,000-285,000 tons for the whole of 2014, compared with output in Italy of about 300,000 tons and Spanish production of about 850,000 tons per year.

"We aim to reach domestic production of 300,000 tons per year," Tunisia's Prime Minister Habib Essid said at a forum held earlier in April in Tunisia. The country will intensify its olive tree cultivation, he said, partly by increasing irrigation and rejuvenating olive trees in some regions.

Zakaria Hamad, Tunisia's minister of industry, energy and mining, told the Global Times in Tunis on April 16 that the country is going to plant more olive oil trees in the north and expects better output this year.

A local analyst, who wished to remain anonymous, told the Global Times that the south of the country is currently the major olive producing area, but it has been affected by drought in recent years.

Figures from the Chinese embassy in Tunisia show that during a harvest cycle from 2013 to 2014, the output of olive oil declined from the previous year's 220,000 tons to 80,000 tons, mainly because of prolonged drought.

"Now that the country is focusing more on the north, which has more arable land and is less threatened by drought, there may be better output of olive oil," the analyst said.

Essid said in his speech at the forum that the overall area dedicated to olive growing has reached 1.8 million hectares in Tunisia, accounting for around 40 percent of the country's arable land.

According to statistics released earlier in April by Tunisia's Ministry of Agriculture, nearly 128,500 tons of olive oil was exported in the first quarter of 2015, and revenue from the exports rose nearly tenfold compared with the first quarter of 2014.

Essid also said Tunisia already ranks second in the world in terms of olive oil exports.

Cooperate with China

Currently, about 80 Tunisian olive oil brands are being exported to more than 50 countries and regions such as the US, Canada, France, Russia and some Arab countries, Loued said.

"But the total volume of olive oil exports from Tunisia to China is not so big, at around 4,000-5,000 tons per year. I think there is huge potential for Tunisian enterprises to expand their business in China," Loued noted.

China is now one of the world's fastest-growing markets for olive oil, and an increase in olive oil imports from Tunisia may benefit Chinese consumers, Wei Jianguo, China's former deputy minister of commerce, told the Global Times on Thursday.

Tunisian olive oil is usually cheaper than olive oil exported from EU countries and is still of good quality, but it has a relatively low market share in China compared with EU brands as most Chinese consumers are unfamiliar with Tunisia and Tunisian products, the local analyst said.

Ben Fradj, a Tunisian olive oil producer, told the Global Times on April 16 that the EU is the major export market for his company.

According to official data, Tunisia now exports 60-70 percent of its olive oil to Spain and Italy.

"I want to explore China's market and export my olive oil to China directly," Fradj said, adding that it could be a good choice to sell via China's business-to-consumer online shopping platforms.

Firms in the country are eager to explore China's market, but they are still lagging behind in terms of packaging.

Wei from the Chinese ministry of commerce said cooperation with Tunisian companies on olive oil could offer a good opportunity for Chinese firms, which have advantages in terms of packaging.

Chinese enterprises could invest in local Tunisian plantations and import olive oil after it is processed in Tunisia, to meet the increasing demand in the Chinese market, Wei said.

Investment welcomed

More than a dozen Chinese firms have already invested in Tunisia, mostly in the communications, water conservancy and oil production sectors, Bian Yanhua, the Chinese ambassador to Tunisia, told the Global Times on Thursday.

"Foreign direct investment is very important for the Tunisian economy and there are about 5,000 foreign companies operating in the country," Hamad said.

"I have been to China several times in order to introduce Tunisia's olive oil into the Chinese market and invite Chinese enterprises to invest in Tunisia," Loued said, adding that some Chinese investors have visited Tunisia's plantations and have shown interest in investment.

Bian said there are still some difficulties facing Tunisia's economy in attracting more foreign investment, including an imbalance in regional development and in the country's industrial structure.

But on the bright side, the country has been stable since the political upheaval of 2011, and promoting economic development has become a common goal for most parties in Tunisia, Bian said.

The IMF has forecast that Tunisia's economy will expand by 3.7 percent this year and 4.5 percent next year.
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