The Hindu Business Line : Turkey: Oiling up the olive market

All is fine with the Turkish economy; the nation got this clean chit from no less than the World Bank chief, Mr Paul Wolfowitz, on a visit to the country last week. The economy has seen robust growth and, according to Wikipedia, "in recent times the Turkish economy has expanded particularly strongly, registering growth rates of 8.9 per cent and 7.4 per cent for the 2004 and 2005 fiscal years respectively." It puts the estimated per capita income (2005) at $8200.

But a leading olive/olive producer and exporter dismisses these numbers saying, "To me, those do not seem to be the right numbers; the government might claim many things and we all know how easy it is to dress up statistics. I don't think we are that rich a country. Don't go by the full tables at this fancy restaurant in Istanbul, this is not the real Turkey, we have a lot of poverty in our rural areas. We are better than what we were in recent times, but nowhere near the glorious days of our past."

He is, of course, referring to the days of the Ottoman empire. But a visit to Istanbul reveals all the signs of a vibrant economy. It looks like the rest of Europe; the best of cars, very good roads over which vehicles can cruise comfortably at 100-120 km/hour till, of course, one hits the traffic bottlenecks in downtown Istanbul, particularly the bridges across the Bosphorous river. The best of hotel chains are here, the restaurants are packed, and so are the shopping malls and roadside cafés.

The agri sector

On the industry front, the majors are textiles, food-processing, electronics, automobiles, steel, petroleum and mining, but agriculture continues to be a pillar of the economy, particularly in employment, providing sustenance to a third of the population. The country has been self-sufficient in food since the 1980s but those engaged in agriculture grumble that the government has been steadily dismantling farm subsidies, particularly on fertilisers and pesticides.

At the Anatolives table-olive and olive-oil exhibition organised by the Zeytindostu Olive and Olive Oil Association, speaker after speaker challenged the ministers and public officials, who participated in various sessions, saying that the government was not doing enough for the agriculture sector, in general, and the olive sector, in particular. But attractive subsidies are available for new planting of olive trees.

Though Turkey ranks the first in the Islamic world in agricultural produce, those engaged in the sector say that with systematic planning, sustained effort and modernisation techniques, the sector can do much more and make a meaningful contribution to exports.

A big concern is the high inflation rate and even higher interest rates. It was astonishing to find that even farmers have to borrow at 20 per cent, though government subsidies and incentives are available to certain key sectors such as olive production.

At the Zeytindostu convention — these are routine in Spain and Italy but was the first of its kind for Turkey — some hard questions were asked and pleas made for soul-searching on why Turkey was not doing much better in the olive sector. It is not only a large country, but also enjoys the same climatic benefits as other Mediterranean countries such as Spain, Italy, Greece and Tunisia — the leading producers of olive, in that order.

Low exports

"In 2006 Turkey exported products worth $85 billion, but the olive and olive oil contribution in our exports was barely $300 million. Surely we can do much better if we take up the challenge of increasing our output, improving the quality of not only our olives and olive oil but also the processing and packaging," said Mr Metin Olken, Chairman of Zeytindostu.

He points out that last year was "not a good year for the olive sector and the annual production was only 150,000 tonnes of olive oil and 300,000 tonnes of table olives. But we know we can do much better and expect the 2007 production to be higher."

He added that 40 per cent of the total exports goes to Italy and Spain, but mainly in bulk, which does not fetch the best possible price for the Turkish producers. "I believe that we have many good varieties of olives but we are lacking in technical knowledge and our storage methods too are not good and this compromises the quality of our final product. We have come together as an Association, and along with the Aegean Olive and Olive Oil Exporters Association, which has 320 members, are trying to improve our production techniques.

"We have higher acidity products and in olive oil this reduces the quality and, hence, the price, but we know that if we work together methodically and scientifically we can reduce the acidity levels and get a much better export price for our products."

But, unlike Greece, where the awareness about the Indian market was near-zero, there is a healthy interest in Turkey on the possibilities and opportunities in India, and this correspondent met a couple of exporters who have supplied to India and are lining up more orders.

Re-entering the IOC

In recent times, there has been a lot of awareness in the Turkish olive sector that countries such as Greece — a historic rival — have gone far ahead in terms of production, consumption and export of olives and olive oil, and the Turkish olive sector, backed by the government, is making an all-out effort to re-enter the International Olive Oil Council (IOC), of which it was earlier a member.

IOC's Executive Director, Mr Habib Essid, who was invited to the Zeytindostu fair and taken, along with three international journalists, around the olive-growing regions in the Izmir-Akhisar belt, assured the members of the Association that the decks had been cleared for Turkey's re-entry into the IOC in a couple of months. But he was emphatic about Turkey first improving its domestic consumption of olive oil.

Against the Greek per capita consumption of olive oil at a stunning 25 kg, that of Turkey is a miserable 1kg. "If you have such a low domestic consumption, how can you be effective in the export market?" he asked. The beneficial effects on the health of a Mediterranean diet that is rich in olive oil have been researched and documented and, across the world, people are trying to consume more olive oil, which is much costlier than seed oils, in whatever quantity possible. But, naturally, the bigger producers consume more.

Seed consumption

For instance, Italy's per capita olive oil consumption is 12 kg, followed by Spain (11 kg) and Syria (8kg). But it came as a surprise to know that the Turks consume seed oils in a much higher quantity than olive oil; the per capita consumption of olives is a respectable 3 kg. (Syria is the highest, at 9 kg.)

As Mr Olken pointed out, "in Turkey we have a habit of eating a lot of olives for breakfast, somehow that has been a tradition which was thankfully not given up. Earlier, our people used to consume more olive oil but with the aggressive marketing of margarine and seed oils, olive oil took a back seat and sunflower oil tops the list in our edible oil consumption."

But olive oil costs much more and, as an Aegean Association member pointed out, "we are a rich country with poor people." Does the line sound familiar?

(Response may be sent to rasheeda@thehindu.co.in)

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