Olive & Olive Oil in Turkey - Why Turkey Is Not the First in the World?

Table of Contents

Executive summary        

Introduction        

Types of olive oil        

SWOT        

Strengths        

Weaknesses        

Opportunities        

Threats        

Reasons why olive oil is important for Turkish Economy        

Why Turkey is not the first in olive oil production        

Solutions and Recommendations        

Conclusion        

Reference        

Executive summary

This report provides an analysis of the sources and problems of Turkey and evaluation of opportunities to develop olive oil production in Turkey. Methods of analysis include market trends, competitiveness of Turkey in the field. The research shows that the fact that, Turkey’s position in the world on olive oil production is in top 5. Next, all recommendations to develop olive oil sector can be found in the relevant part of the report. In particular, the major problem is undeveloped image of Turkish olive and olive oil products which have high quality, unique taste and aroma of different varieties. Moreover countries social difficulties affect the whole sector and olive oil subsector particularly. Immigration, infrastructure and education are the most important factors of low productivity and awareness of products value and potential. On the other hand there are a lot of advantages: transportation ease, thanks to geographical nuances, location of thermal springs, and last but not the least competitiveness of the market.

We are trying to introduce you our vision of the whole situation and probable solutions which are supported with various facts and statistics.

Introduction

Olive oil is a type of oil extracted from olives (fruits) with high nutritional quality; the oil is mostly used in cooking, pharmaceuticals and cosmetics, this makes it very crucial in any economy. Cultivation of this special fruit occurs only in certain regions of the world. Mostly in importance stand those countries located along the shores of the Mediterranean. Turkey is included among these fortunate countries. The oil is used globally mainly Mediterranean countries such as; Spain, Turkey, Italy, Greece and Tunisia. Olive oil has been used in Turkey since ancient times and during 1960’s, olive oil sector engaged in international market. The top three olive oil companies in turkey are; Adetepe located in Kucukkuya, Ales in Adana and Amed in Izmir.

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Types of olive oil

The sector plays a very important role in the Turkish economy because of high domestic demand and consumption, Turkey has been among top ten lists in the largest olive oil producers in the world Spain being the first largest producer of olive oil. Olive oil sector has shown an amazing improvement in Turkey such as; introduction of virgin olive oil and also the increase in volume and supply to more than 300 thousand tons of olive oil production throughout the year. Olive oil production plays a big healthy role in the country due to its nutritional quality and benefit. Olive oil production has gradually increased with the help and support of government such the development of modern equipment used in extracting oil.

In terms of exports: Turkey exports olive oil to different countries including; European Union countries, Saudi Arabia, Philippines, Australia, Japan and South Korea. There has been a decrease in exporting of olive oil in Turkey by 52% which leads to the decrease on market share in the country and global wide.  

Consumption: due to high population, there is high consumption of olive oil in Turkey, but comparing with other major producers (competitors) Turkey hardly consumes 1kg while Italy consumes 11.5kg, Greece consumes25kg and Spain consumes 10kg per year. There is a problem of marketing of the olive oil sector worldwide.

Market share: Turkey’s global share of olive oil production is around 16.5%; Turkish government is trying to increase the rank of turkey from the fourth largest olive producers to the second. The government provides subsidies and tax breaks to improve the olive oil sector.

SWOT

Strengths

Strategic geographical position of Turkey (Closeness to Europe which is the first olive oil consumption market). This position gives the commercial exchanges between Turkey and the European Union.

The labor force and the mechanical traction are relatively cheaper as compared to European competitor’s countries.

Historically, climate is suitable for Turkey, and for generations traditions in different regions of Turkey were saved and in these the social attachment of farmers to olive trees has its origins.

Importance of the tourism sector in Turkey is huge. The hotels will offer the possibility to promote the olive oil export. Lots of people visit Turkey every year and tourism sector has an effect on sales and its exports.

Weaknesses

Raising of the olive oil production cost.

Absence of long-term development strategy for the sector.