08 Jun

Tunisian Olive oil : An age old tradition

Here an interesting article for investors concerning the Olive’s Oil potential:

Tunisian olive oil : So many advantages, strong potential

• 1.6 million hectares of olive lives
• 56 million olive trees
• 745,000 tons of olives produced annually on average
• 173,000 tons of olive oil produced annually on average
• 115,000 tons of olive oil exported annually on average
• 1140 oil presses…

Second biggest area planted in olive trees in the world

Tunisia ‘s 1.6 million hectares of olive trees represent almost 19% of all olive tree orchards worldwide, in second place behind Spain but ahead of Italy and Turkey .

The production of olive oil holds a strategic position in Tunisian agriculture, representing one third of all cultivable land on which 56 million olive trees stand. 32% an: new plantings and 68% are in full production.

Savored over the ages

This immortal tree has grown in Tunisia since the 8th century BCE, introduced by the Phoenicians. Many Mediterranean civilizations – Greek, Hebrew, Carthaginian, Roman and Arab – contributed to its development. Romans developed the technique for extracting oil. Early presses can be seen at digs in Sbeitla (Sufetula) and El Jem (Thysdrus) and are depicted in many Roman mosaics unearthed in Sousse. The olive tree unites men through the ages, with its universally recognized symbol of olive leaves representing peace and wisdom and through its commercial value as an important source of wealth. Since Phoenician times and throughout the successive civilizations that have marked Tunisian history, olive oil has been put to various uses: food, lighting, medicine, cosmetics … and today it continues to he an important part of the Tunisian economy

A distinctive taste at an unparalleled cost

Tunisia’s competitiveness in producing olive oil can be seen in :

• A long tradition of and major potential (56 million olive trees, 1440 presses) for producing a quality product, recognized know-how, providing 6 to 12% of world-wide production;
• Its rank as number two world exporter of olive oil, with the best (66%) export/production ratio in the world ;
• Ongoing improvement of quality, with the share of premium olive oil constantly on the rise;
• Olive oil production costs in Tunisia that are just two thirds of costs in Spain, number one world producer of olive oil

Tunisia world producer of olives and olive oil

Olive production has increased considerably over the past decade (1990-2000), amounting to an annual average of 745.000 tons, up from 526.000 tons a decade earlier (1980-1989).

173.000 tons of olive oil on average are produced each year.

The olive oil industry includes 1440 presses with a grinding capacity of about 23.000 tons a day and 24 processing units with a 15.000 tort capacity.

Tunisia is the 4th main producer of olive oil, after Spain, Italy and Greece.

Tunisia world exporter of olive oil

Olive oil represents almost 40% of agrofood exports and 5% of the country’s total export. Tunisia exports 66% of its production, 115,000 tons a year on average, most of it in bulk.

Tunisian oil : So many opportunities

Processing of olive oil

Tunisian olive oil in not identified as such on foreign markets, since most of it (H5%) is exported in bulk. It is high time to invest in one of the most promising areas for development of Tunisian olive oil : processing in assorted quantities (0.5 to 20 liters) and packaging (glass, metal).

Organic olive oil

Another likely area for investment is conversion to organic cultivation and processing of olive oil.
Most Tunisian olive growers use little or no chemical fertilizers and processing of organic oil differs little from that of conventional modes. Thus the changes needed to turn out organic olive oil will be relatively easy and quick.
Furthermore, government support is available in the form of lax and financial assistance for converting to organic cultivation and meeting the terms of the relevant legal code in force since 1999.
35,000 hectares of olive trees for oil are currently certified or in the process of converting to organic production

Intensive olive oil production

Tunisian olive oil production is currently turning to irrigated farming. Thus intensive cultivation on large expanses in the north constitutes an attractive investment opportunity.

A higher quota for exports to the European Union

As per the agreement reached in 2000, 50,000 tons of Tunisian olive oil can be exported customs and tax-free. An annual increase of about 3% will put this total up to 56,000 tons by 2005.

Market diversification

GATT agreements open up new markets for olive oil, notably in Japan , Australia and Canada.
Tunisia has high potential for export to the US that can he exploited through marketing and access to distribution circuits.

Modernization of grinding units

31% of current equipment capacity uses the continuous system to extract olive oil. Short-term objectives involve a considerable increase in this figure, slated to reach 50%, and to use continuous lines in all of the country’s olive producing areas.

Tunisian tradition of hospitality

Conditions for foreign investment

Agricultural production

• Investment in the framework of a partnership does not require authorization.
• Foreign parties can own up to 66% of capital.
• Agricultural land used in the framework of a partnership arrangement can only be rented.
• Foreign promoters have the same advantages as those available to Tunisian promoters.

Agrofood industrie

• Investment does not require authorization.
• Foreign promoters can hold up to 100% of capital.
• Foreign investors have the same advantages as those available to Tunisian promoters.

Tax incentives


• There is no VAT for agriculture.
• Agricultural inputs are exempt from VAT and customs duty.
• The minimal tax rate (10%) applies.


• Subscription to capital and capital increases is deducted from the tax base.
• There is no income tax for the first 10 years of operations.
• Equipment needed for any given project is exempt from VAT and customs duties.

Tax incentives


• Investment premiums for agriculture vary from 7 to 25% according to the category.
• A targeted investment premium of 30-40% is available for priority activities.
• There is also an investment premium for activities in initial processing in agrofood industries that benefit regional development
• Priority zones: 25%
• Regional development zones: 15%
• Other zones: 7%
• The premium for organic farming is for 30% of the cost of targeted equipment.
• There is a yearly premium for five years to help cover the cost of being certified for organic production.

Incentives for companies that export their entire production

Exemption for equipment and inputs

• From import customs duties;
• From VAT for local purchases.

Possibility of sales on the local market

• 30% of agricultural production;
• 20% of agrofood production.

Hiring of foreign staff

• 4 upper management executives can be hired with no prior authorization.

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