December 18, 2017 / 2:28 PM / 2 years ago

Tunisia expects surge in olive oil production in fillip to battered economy

* Tunisia hopes surge in olive production will ease unemployment

* Better rainfall lifts output by 160 percent

* Tunisian economy hit by fall in tourism revenues

By Ulf Laessing

BENI HASSEN, Tunisia, Dec 18 (Reuters) - Trucks loaded with boxes full of olives were queueing at a press plant in this small Tunisian town as the North African country sees a surge in olive oil production in a badly-needed boost to its ailing economy.

Tunisia, one of the world’s top three olive oil producers, expects olive production to jump by 160 percent to between 1.5 million tonnes and 1.6 million tonnes in the 2017 season which started in November, the agriculture ministry says.

That will translate into up to 280 million tonnes of olive oil, about 80 percent of which will be exported, helping to generate hard currency needed to stabilise its battered dinar.

Tunisia has been in economic crisis since a popular uprising in 2011 ousted autocrat Zine El-Abidine Ben Ali. The crisis has deepened as militant attacks took their toll on the tourism industry and weakened the dinar against hard currencies.

“It will be an exceptional (olive) season thanks to much better rainfall than last year,” said Hamdi Khalifa, owner of an olive oil press in Bani Hassen, one of the main production areas located a two-hour drive south of the capital Tunis.

His workers produce 90 tonnes of olive oil each day in the press compared to 40 tonnes a year ago, he said. Prices have shot up with 10 litres of oil now selling for 90 dinars.

Last year’s production had been hit hard by a drought.

The production boom has helped ease unemployment in rural areas with farmers complaining that they are struggling to find enough farm hands.

Some 135,000 workers were needed for this year’s season for up to three months, the agriculture ministry said in a statement.

“I’m paying now (workers) 35 dinars a day but its not easy to find workers,” said Sabri Barki, a farmer who owns 100 olive trees in the Bani Hassen area. “Prices have gone up.”

The olive oil industry relies on 70 million olive trees that cover around 1.7 million hectares. They provide a living for at least 500,000 families in the North African country of 11 million.

It hopes that rising olive oil exports will help reduce its record trade deficit, which hit $4.61 billion in the first nine months of this year.

Last month, the agriculture ministry said Tunisia aimed to export about 220,000 tonnes of olive oil this season compared with about 75,000 tonnes last season that brought in $320 million.

World olive production is seen rising by 14 percent to 2.9 million tones in the 2017/18 season with Tunisia posting the highest gain with a 120 percent rise, according to the International Olive Council, an industry body.

Top producer Spain, which has been hit by a severe drought this year, is expected to post a 15 percent drop in output.

The government has been tying to boost production with loans for farmers. Stability in Tunisia is a concern for the European Union as unemployment has driven young Tunisians into illegal migration and joining jihadist groups abroad. (Editing by Adrian Croft)

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