Tunisia in North Africa is reshaping the global olive oil market, reviving the renown it enjoyed in ancient Roman times. While leading European olive oil regions like Italy and Greece struggle with the climate crisis, Tunisia alone has harvested a record bumper crop. The Tunisian government has elevated olive oil from a simple agricultural product to a national strategic asset and launched full-scale economic diplomacy.
Rabobank, a financial institution with strong credibility in agricultural finance, said on the 1st (local time) that Tunisia's olive oil production this year will reach at least 380,000 tons and up to 400,000 tons. That would exceed last year's 280,000 tons by more than 35%. Najeh Saidi Hamed, head of the Tunisian Olive Producers Association, told the Financial Times (FT) that this year's harvest could be as high as 500,000 tons. That would be a record high for Tunisia's olive industry.
According to the Foreign Agricultural Service (FAS) under the U.S. Department of Agriculture (USDA), global olive oil production is currently estimated at about 2.7 million tons. By contrast, consumption far exceeds 3 million tons. A supply shortfall of about 300,000 tons—roughly 10% of production—is occurring. Consecutive droughts in Italy and Greece, the main producing regions, have cut their output in half.
Greece's 2024 production plunged 49% from 2023. Italy's output last year fell 39% compared with 2024. If Tunisia produces more than 380,000 tons of olive oil this year as expected, it will more than make up for the gaps in Italy and Greece. At the same time, it is poised to overtake both countries and stand as the world's No. 2 olive oil producer and exporter after Spain.
Olive oil accounts for more than 40% of Tunisia's total agricultural export value. It is a key driver of the country's trade balance improvement. The Tunisian government also treats olive oil as a cultural product and a strategic asset, not just food. While Italy and Greece faced existential threats from extreme drought linked to climate change and olive quick decline disease, the government planted more saplings of its drought-resistant varieties, "Chétoui" and "Chemlali," to boost output.
In 2024, the Ministry of Foreign Affairs brought Tunisia's olive oil, long overshadowed by European countries, to the center of its diplomacy. Minister Mohamed Ali Nafti on Dec. 22 proclaimed "Tunisia Olive Oil Diplomacy Day." It is a sophisticated diplomatic strategy to leverage olive oil to drive tourism, logistics and international cooperation. Nafti said, "Tunisia's 100 million olive trees and 2 million hectares of olive farms are not just farmland," adding, "Olives symbolize Tunisia's sovereignty and economic self-reliance." He went on to cite "Sharaf Zaytouna," the country's oldest olive tree, more than 2,500 years old, stressing that "Tunisia is the true legitimate heir in Mediterranean agriculture."
In Asia, including Korea, Tunisian olive oil is unfamiliar. Until now, about 80% to 90% of Tunisia's olive oil has been exported in bulk to Europe, especially Italy. Tunisian olive oil overwhelms other European products in price competitiveness. Average wages for Tunisian agricultural workers are one-fifth to one-tenth of those in Italy or Spain. In addition, the North African sunshine near the Sahara helps prevent pest and disease damage. Compared with Europe, which sits at a relatively higher latitude, organic cultivation is easier. On paper, the production cost of Tunisian premium olive oil is about 30% to 40% lower than Europe's. Even so, its acidity—the key quality metric for olive oil—stays at 0.2% to 0.3%, rated among the world's best.
Italian companies have imported relatively inexpensive Tunisian olive oil in large volumes whenever domestic production fell short, then re-exported it under Italian brands. Under the EU inward processing relief (IPR) rules, Italian olive oil brands can mix domestic and Tunisian oils for sale. They need only note in small print on the back label that it is a "European Union/non-EU blend." They can even simply bottle Tunisian olive oil and sell it by stating "bottled in Italy."
Experts see this year as the optimal time for Tunisia to stand out in the olive oil market. With major European producers recovering slowly, Tunisia is expected to serve as a counterweight that stabilizes international olive oil prices. International olive oil prices hit a record high in 2024, topping $10,000 per ton (about 14.5 million won). Since then, prices have remained high, above $9,000 per ton based on Italian olive oil.
Agricultural expert Fawzi Zayani said in an FT interview, "This year will be recorded as the golden time in Tunisia's agricultural history," adding, "We must strengthen Tunisia's unique protected designation of origin (PDO) in the international market and raise the share of expensive premium bottled products, currently below 10%, to over 30%."