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USDA GAIN: Oilseeds, Cotton, Sugar, Grain and Feed


05 March 2012

USDA GAIN: Tunisia Oilseeds, Soybean and Products Annual 2012USDA GAIN: Tunisia Oilseeds, Soybean and Products Annual 2012

Tunisia’s olive harvest for MY 2011/12 totaled 900,000 MT, an increase of more than 60 percent over last year’s harvest. Olive oil production is projected to be 180,000 MT, up from 110,000 MT in MY 2010/11. Tunisia’s imports of soybeans continued their steady rise that began in 2009 with the opening of the sole oilseed crushing plant in the country. In 2011, Tunisian soybean imports were estimated at about 490,000 MT, up from 320,000 MT in the year before. Soybean meal imports continued their decline, with a 13 percent drop in 2011 that followed a 59 percent fall in 2010. Tunisia’s olive oil exports in 2011 totaled 100,000 MT, valued at $287 million, compared with $310 million in the previous year. U.S. corn oil exports increased by 62 percent in 2011, reaching $110 million, and controlled 57 percent market share.
USDA GAIN Report - Oilseeds, Cotton, Sugar, Grain and Feed

Executive Summary:

Tunisia's olive production for MY 2011/12 is estimated at 900,000 MT, up from last year's production of 550,000 MT. Oilseed imports, principally soybeans, continued their steady rise that began in 2008 with the start of operation of the sole oilseed crushing plant, Carthage Grains. In 2011, Tunisian soybean imports are estimated at about 490,000 MT, up from 320,000 MT in the previous year, despite several disruptions in Carthage Grains' operation because of the deteriorating security situation and worker strikes that followed the Tunisian revolution. In 2011, the U.S. share of the Tunisian soybeans import market rose to 50 percent, with the value of soybeans and soybean product exports estimated at $117 million.

Prior to the construction of the Carthage crushing plant in 2009, Tunisia had no oilseed meal production capacity. In 2011, the plant produced about 350,000 MT of soybean meal, up from 230,000 MT. Carthage Grain production is covering almost all domestic needs. Tunisian soybean meal imports in 2011 decreased by 12.5 percent, following a decline of 59 percent CY 2010. In the mean time, U.S. soybean meal exports to Tunisia were absent in 2011.

Tunisia's olive oil production in MY 2011 is estimated at 180,000 MT, up from 110,000 MT in MY 2010. One third of the edible oil consumption is provided by olive oil, as most of the local production goes to export markets. Tunisian olive oil exports registered a decline of 9 percent in value in 2011, following a 22 percent drop in 2010. Olive oil exports totaled 100,000 MT, valued at $287 million, and down from the $310 million registered in the previous year. The Carthage crushing plant produced about 90,000 MT of soybean oil in 2011, up from 60,000 MT in 2010. Around 80 percent of the soybean oil produced by the plan is destined for the export markets and 20 percent for the local market. Tunisia's requirements of edible oil are mostly met through imports of crude vegetable oils (refined locally) and, to a lesser extent, through domestic olive oil production. Total Tunisian edible oils imports increased by 22 percent in 2011. Imports of corn oil doubled in volume, while imported soybean oil quantities remained stable, while their value increased 44 percent, to $200 million. U.S. corn oil exports increased by 62 percent, reaching a total of $110 million and controlling 57 percent market share in 2011.

Oilseed, Olive, Oilseed, Soybean

Production:

Apart from olive, Tunisia' oilseed production remains insignificant despite the Ministry of Agriculture's persistent efforts to encourage farmers to grow rapeseed and sunflower crops in order to diversify sources for oilseed production. Tunisia has about 75 million olive trees spread over one-third of Tunisia's arable land, making the olive crop the main domestic source of edible oils. Olive production in MY 2011/12 is estimated at 900,000 MT, up from last year's production level of 550,000 MT. This increase was mostly due to normal production fluctuation related to weather conditions from one season to another and it is a common feature of the predominantly rain-fed olive tree farming. The harvest of the olive crop usually starts in early November and lasts until January.

The Tunisian olive sector has not yet gained a complete autonomy, despite eliminating the monopoly of the Office National des Huiles (the state-run edible oils board) in 2004. In the last few years, there has been a notable increase in the activities of olive speculators (crop buyers) in the olive oil market. These speculators are neither crushers nor exporters, and they buy olives on the trees well before the start of the crushing season in an attempt to dictate prices when the season begins. It is believed that the abolition of the state reference prices as well as the absence of a formal mechanism for price discovery, such as an olives exchange, have contributed to the wide fluctuations in olive prices. There are several large scale olive farms that used to belong to the ousted President's family that are currently facing some difficulties, where olive production and harvest are significantly disrupted.

Consumption:

The harvest of the 2011 olive crop began in early November and continued till the end of February. In some areas, the season was cut short because of lower olive availability in the market. The bulk of the olive harvest was processed into various grades of oil by 800 olive mills scattered around the olive production areas. The mill-gate prices of olive oil reflect prices of green olives during the harvest season. In 2011, the average price for olives ranged between $0.38 and $0.51 per kilos.

Meal, Soybean

Production:

Prior to the opening of the Carthage crushing plant, Tunisia had no oilseed meal production capacity. In 2011, the plant produced about 350,000 MT of soybean meal, up from 230,000 MT. The plant production is covering almost all Tunisia's domestic needs. The company's economic viability, however, remains fragile because of its tight profit margin for crushing and some social problems that it is currently facing. For example, the company had to temporarily stop its crushing activities for one and a half month due to strikes and workers sit-ins.

Consumption:

Soybean meal consumption is mainly driven by the poultry sector, with 75 percent of total soybean meal used in broiler, turkey and egg production. The remainder is utilized in cattle feed rations (dairy and feedlot operations). Soybean meal is often mixed, according to standardized formulas, with other feed ingredients to produce various types of compound feed by 350 feed manufacturers in the country. Total animal feed production is currently estimated at about 1.7 MT annually. Tunisian total consumption of soybean meal in CY 2011 was about 385,000 MT, up from 325,000 MT in the year before. This increase was mainly driven by re-exports of about 32,000 MT to Libya, in addition to some smuggling activities that were taken place due to lack of security at the border. The use of new-to-market feed ingredients derived from corn such as corn gluten meal, and more recently, distillers dried grains with soluble (DDGS) by the Tunisian feed manufacturers is increasing but at a relatively small scale.

Oil, Soybean Oil, Olive

Production:

Olive oil remains the principal edible oil produced in Tunisia. Olive oil production in MY 2011 is estimated at 180,000 MT, up from 110,000 MT in MY 2010. Only one third of the edible oil consumption is provided by local olive oil, as most of the local production goes to export markets. Because of depressed world prices and a disorganized supply chain, many Tunisian producers are facing huge financial difficulties and were forced to sell their production in order to pay off their obligations to the creditors. In January 2012, the new elected government decided to help olive farmers and olive oil producers by requiring the state oil buying agency (Office de l'huile) to buy specified quantities of local olive oil at a set price from producers and resell them to the consumers.

In 2011, the Carthage crushing plant produced about 90,000 MT of soybean oil, up from 60,000 MT in 2010. Around 80 percent of the soybean oil produced by the plan is destined to the export markets and 20 percent to the local market. The company was finally able to have an agreement with the government to resolve a longstanding legal issue that prevented the Office de l'huile from buying any locally produced soybean oil. For about three years, the Office de l'huile did not allow the company from participating in tenders, while relying on imported crude vegetable that are refined and packaged locally to satisfy local market needs in Tunisia.

Consumption:

Consumption of olive in Tunisia oil is very price-elastic, with quantities consumed locally widely fluctuating between 20,000 MT and 60,000 MT. For the last ten years, the average domestic consumption was estimate at about 45,000 MT. Olive oil prices are mainly driven by supply and demand forces in the EU markets, which are the main export destinations for Tunisia's olive oil. Regardless of the size of the domestic crop, olive oil remains relatively expensive and thus unaffordable for the large segment of the Tunisian households. In recent years, local consumption needs have been met through importing cheaper vegetable oils, such as soybean and corn oils, to be refined, bottled and sold locally. Olive oil tends to be consumed mostly as salad dressing, whereas imported vegetable oils are used mainly in every-day cooking. Corn oil is considered as a mid-range product, between the low-quality subsidized cooking oil and the up-scale olive oil. In 2011, vegetables oil consumption increased considerably, partly because of re-exports to the Libyan market and the arrival of almost one million refugees who escaped the war in Libya for shelters in Tunisia.

March 2012

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