Free trade deals with Indonesia and the U.K. could provide Palestinian producers with ample export opportunities. The prospects of another poor harvest may complicate this.
Indonesia and the United Kingdom have separately agreed to import Palestinian olive oil tariff-free.
The two deals offer a glimmer of hope for an industry that has been hampered by high production costs, limited export markets and conflict with neighboring Israel.
Given our untapped potential and coupled with a free trade agreement we anticipate to establish solid and sustainable trade relations with the market for olive oil.- Mohammed Alramah, market intelligence officer at the Palestinian Trade Center
The olive oil sector is currently worth about $66.7 million in Palestine, accounting for 4.6 percent of the nation’s GDP, according to a 2018 report from the World Bank.
“Olive oil exports to Indonesia are actually one of the highest potential products for that market following dates exports,” Mohammed Alramah, a market intelligence officer at the Palestinian Trade Center, told Olive Oil Times. “While in the case of the U.K. market, the tools show that we are actually achieving more than our potential share in the market for both olive oil and dates.”
See Also:Olive Oil Export NewsIndonesia’s Central Statistics Agency expects that Indonesia will increase its imports of olive oil and other agricultural goods form Palestine by 113 percent this year.
“The tariff exemption is significant and should be reflected in the products’ pricing in the market,” Djatmiko Bris Witjaksono, director of foreign trade analysis at Indonesia’s Ministry of Trade, told Arab News. “Eventually it will boost the competitiveness of Palestinian products in Indonesia.”
According to Alramah, the new trade deal and the resulting increase of Palestinian olive oil exports will also help to establish Palestinian olive oil brands in foreign markets.
“Given our untapped potential and coupled with a free trade agreement, we anticipate to establish solid and sustainable trade relations with the market for olive oil,” he said.
The Palestinian Trade Center, which helps to develop the nation’s exports, has rated Indonesia as its eleventh highest priority olive oil market. A bit higher up on that list, in at seventh, is the U.K., which has seen considerable growth in olive oil imports from Palestine in the past half-decade.
Between 2012 and 2016, the most recent year for which data is available, the value of olive oil exports from Palestine to the U.K. increased from $286,000 to $1,988,000.
The U.K. had previously eliminated tariffs on imported olive oil from Palestine, but in light of its planned departure from the European Union at the end of this month, has confirmed that it will seek a similar deal once it is outside of the 27-member trading bloc.
The U.K.‘s Foreign Trade secretary, Liam Fox, made the announcement at the end of last month after a tour of the region.
“[This] agreement will help give U.K. and Palestinian businesses, exporters and consumers the certainty they need to continue trading freely as the U.K. prepares to leave the E.U.,” Fox said. “The agreement reflects the importance of the U.K.-Palestinian relationship, a thriving Palestinian economy is in all our interests.”
Palestine currently is unable to competitively export olive oil to many countries in the E.U. due to prohibitive tariffs, which lead Palestinian olive oil to be too expensive and unable to compete for supermarket shelf space.
Antoine Mattar, chair of the Palestine British Business Council, welcomed the move and said it will be helpful for both countries’ economies as well as the Palestinian olive oil sector.
“This agreement avoids unnecessary tariffs which will ultimately save British consumers money on items such as dates and olive oil,” Mattar said. “Frictionless trade also helps to keep people in employment and create new jobs, supporting the Palestinian economy and helping Palestinians work towards a prosperous future.”
Alramah believes that as olive oil consumption continues to grow modestly in the U.K., Palestinian producers will be able to capitalize and remain a competitive exporter to the world’s fifth largest economy.
“If Brexit took effect and there is a new free trade agreement with the U.K., we anticipate our exports to continue to grow in small increments as our olive oil production increases,” he said.
In spite of these free trade deals, Palestinian exports may be hampered in the short-term after a poor harvest at the end of last year and another potential bad harvest looming for next year.
“In 2018, olive oil production was limited because of an infestation,” Alramah said. “Olive trees have been infected by an insect, the olive leaf gall midge, particularly in Tulkarem and Qalqiliya governorates in the northern West Bank.”
“Based on initial estimates, the forthcoming olive harvest may be seriously affected with 80 percent of production at risk,” he added.
More articles on: exports, import/export, Palestine
Jul. 15, 2024
As Value of Tunisian Exports Soar, Packaged Olive Oil Struggles
Olive oil export revenues in the first seven months of the 2023/24 crop year nearly doubled in Tunisia, but many producers are not reaping all the benefits.
Mar. 22, 2024
The Growing Pains of Albania’s Ascendant Olive Oil Sector
Production has doubled in the past decade and is expected to continue to rise. Some worry that quality will not follow suit.
Oct. 18, 2024
Trump’s Tariff Proposals Would Sting U.S. Olive Oil Consumers
Whether there is a ten- or 60-percent tariff on all imported goods, most observers believe olive oil will become more expensive, and consumers will pay the difference.
Nov. 20, 2023
Finding Balance in a Changing Sector Yields Success for Portuguese Exporter
Quality serves as Est. Manuel Silva Torrado’s north star as the company navigates export markets and the country’s rapidly changing sector.
Apr. 11, 2024
Turkish Producers Pray Export Ban Ends with Ramadan
While the prohibition on bulk exports has helped control domestic prices, producers worry it has hurt their credibility with international partners.
Jul. 29, 2024
Sustainability Guides Award-Winning Producer in Turkey
Garisar successfully navigates climate extremes and economic challenges, producing sustainable, award-winning quality.
Sep. 27, 2024
Climate Chaos Wreaks Havoc on Chilean Harvest
High winter temperatures in the north and relentless rain in central Chile combined to create a perfect storm for olive growers, resulting in the lowest production levels in a decade.
Jun. 5, 2024
Pompeian VP Says Baltimore Bridge Disaster Cost Company Millions
While the company was able to receive its most recent shipment of European olive oil through the port, the measures taken after the disaster were unsustainable in the long run.