How drought in Europe proved a blessing to Middle Eastern producers of olive oil

Special How drought in Europe proved a blessing to Middle Eastern producers of olive oil
Palestinian farmers pick olives during harvest season at a grove in Khan Yunis in the southern Gaza Strip. (AFP)
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Updated 15 September 2023
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How drought in Europe proved a blessing to Middle Eastern producers of olive oil

How drought in Europe proved a blessing to Middle Eastern producers of olive oil
  • Disappointing harvests in Europe have given Arab producers a chance to assert dominance over competitors
  • The cooking ingredient is of considerable economic, cultural and agricultural value around the world

DUBAI: The latest victim of planetwide shifts in temperatures and weather patterns appears to be the ancient olive tree.

A yearlong drought coupled with a blistering summer in southern Europe, the heartland of olive oil production, has left Spain, the world’s largest producer, and other countries struggling to satisfy global demand for the kitchen staple.

As a result, manufacturers across Europe have turned their attention to the Middle East for help in overcoming the shortage.

“The supply gap needs to be filled and there’s no better time for the Middle East, and particularly the Gulf states, to begin filling this gap,” said Mazen Assaf, an olive oil sommelier and entrepreneur.




The Arab world is regarded as the birthplace of olive oil and is home to about 1,600 varieties of olives, says Mazen Assaf, an olive oil sommelier and entrepreneur.

“The opportunity is there and clearer than ever.”

In recent months, Italy and Portugal, the world’s second- and fourth-largest olive oil producers respectively, have also encountered climate-related setbacks, leading to diminished stocks.

In contrast, Greece, which is third largest producer, has benefited from mild weather and adequate rainfall throughout the year. Even so, it is struggling to meet the surging international demand for the commodity.

“Olive oil is a culinary staple that is deeply ingrained in Mediterranean culture. However, its influence spans the world,” Assaf told Arab News.

“Demand for it is growing globally and supply is dropping dramatically across Europe, which is leading to higher prices around the world.”

Typically, Spain produces more than 50 percent of the world’s olive oil, with an average of 1.2 million tons per year.

But for the past two years, a series of heatwaves marked by temperatures pushing 40 degrees Celsius have whittled the country’s output down to about 600,000 tons.




The Chetoui and Chemlali varieties are popular in Morocco and Tunisia, and the Souriani, which is native to the Levant countries. (AFP)

As a result, the price of a bottle of olive oil in Spain rose by about 60 percent in 2022 and currently hovers around 10 euros per liter at retail for the extra virgin type.

The reverberations of Spain’s drought and olive oil shortage are being felt in Turkiye, where the trade ministry has imposed a three-month ban on olive oil exports.

“Spain’s worries are not exclusive to it,” Assaf said, adding that wildfires were becoming an increasingly common phenomenon across the Mediterranean.

“The presence of the xylella fasticiosa bacteria in these lands is also slowly killing olive trees, leading to a further drop in supply,” he said, referring to Greece and Italy.

According to some reports, the deadly bacteria has killed more than 21 million olive trees in the southern Puglia region of Italy, which until recently accounted for half of the country’s olive oil production.

Naim Ben Said, a partner at the Dear Goodness mill in Tunisia, said global olive oil production had fallen 20 percent from the previous harvest season, primarily as a result of reduced output in Europe.

TYPES OF OLIVE OIL

• VIRGIN: This is the pure juice extracted from olives through mechanical means. Depending on specific quality parameters like acidity and oxidation, it can also be classified as extra virgin.

• MIXED: Also known as pure or ordinary olive oil, this is a blend of extra virgin and, typically, chemically refined oil.

• POMACE: This is extracted from the residue of olives after the initial pressing process.

Source: Naim Ben Said, partner at the Dear Goodness mill in Tunisia

“In terms of global consumption, the EU, US and Turkey account for more than 65 percent of the total,” he told Arab News.

In terms of per capita consumption, Greece ranks top with an annual average of 12.7 liters, followed by Spain with 11.6 and Italy with 9.1.

By comparison, in the Middle East and North Africa region, Morocco has the highest per capita annual average consumption with four liters, followed by Syria with 3.9 and Tunisia with 2.5, according to Said.

With the current production levels predicted to become the new normal, several countries in the Middle East, notably Lebanon, Tunisia, Morocco and Jordan, are helping to cover the shortfall.




An aerial view of an orchard of olive and fig trees in the village of Kurin in the rebel-held southern part of Syria’s northwestern Idlib province. (AFP)

According to Assaf, the Arab world is regarded as the birthplace of olive oil and is home to about 1,600 varieties of olives, including the Chetoui and Chemlali that are popular in Morocco and Tunisia, and the Souriani, which is native to the Levant countries and known for its exquisite flavor and high levels of antioxidants.

“Lebanon has seen a surge in exports, while Tunisia and Morocco have historically exported over 90 percent of their production to Europe, where it is bottled and filled as European oil,” he said.

Despite being in the grip of a severe and prolonged economic crisis, and the related challenges of labor shortages, power disruptions and soaring inflation, Lebanon produced 17,000 tons of olive oil in 2022-23, in keeping with its five-year average.

Facilities in Saudi Arabia and Jordan have also ramped up their production capacity.

The latter has maintained a steady supply of olive oil despite the setbacks dealt by climate change and water scarcity. Production is predicted to increase by up to 25 percent during the next season, with a slight rise in prices, according to the Jordanian Olive Presses Owners’ Syndicate.

In recent years, Jordan’s olive oil production has experienced fluctuations, including a decline from 34,720 tons in 2019 to 23,000 tons in 2021. But the outlook is bright.




The olive oil industry plays a crucial role in countries across the MENA region, providing a livelihood for farmers and supporting domestic and international trade. (AFP)

According to its agriculture ministry, Jordan is home to about 11 million olive trees, accounting for 72 per cent of its fruit tree cover and nearly 30 per cent of its cultivated area.

The likelihood of global temperatures surpassing the critical 1.5 degree increase threshold by 2027 poses a significant threat to the olive oil harvest cycle in many Arab countries, including Jordan.

“The impact of this is pushing the world into uncharted territory, where similar climatic scenarios to those playing out in Europe cannot be ruled out for countries in the Middle East and North Africa,” said Farah Najem, a senior consultant at engineering and professional services firm WSP.

She said that the current olive oil crisis presented a unique situation for economies in MENA, many of which had a traditional reliance on primary industries such as olive harvesting.

“From the Greeks to the Romans, to multiple geographies across MENA, olives have found their way into the bowls and plates of civilization for centuries,” she told Arab News.

The olive oil industry plays a crucial role in countries across the MENA region, providing a livelihood for farmers and supporting domestic and international trade.

Despite the challenges facing the industry there is still reason for optimism, with innovative and sustainable strategies helping to ensure its future, according to Najem.




According to Fortune Business, the size of the global olive oil market currently stands at $14.20 billion. (AFP)

“Many initiatives for increased food production in the region demonstrate the resolve to overcome geographical limitations, water scarcity and climatic difficulties,” she said.

Such initiatives showed how sustainable production could be a key factor in preserving food security and economic stability, she said.

“The upshot for countries in the Middle East with active food and water security initiatives is that they can position themselves to create robust domestic food security mechanisms while enhancing economic stability against global market fluctuations,” Najem said.

According to Fortune Business, the size of the global olive oil market currently stands at $14.20 billion, and it is expected to grow to $18.42 billion in 2030 — that is, at a compound annual growth rate (CAGR) of 3.3 percent. In the Middle East and Africa (MEA) region specifically, the market size is expected to grow at a CAGR of 2.18 percent over the same period.

“This represents a significant growth projection for MENA, a region that is home to several countries leading the charge to be at the forefront of the global food security agenda,” Najem said.

Meanwhile, non-Mediterranean countries have also been witnessing a steady increase in demand for olive oil.

“Olive oil is the healthiest of fats, it is packed with antioxidants and is a core ingredient of the healthy Mediterranean diet,” Assaf said.

“With it being naturally vegan, it is becoming ever more attractive to the average consumer.”




“Olive oil is the healthiest of fats, it is packed with antioxidants and is a core ingredient of the healthy Mediterranean diet,” Mazen Assaf said.

He said there had been a surge in demand for olive oil in the US — along with a sharp increase in production, especially in California — as well as in Southeast and East Asia, where countries like Japan had shown a keen interest in olive oil production as consumption soared.

Chile, Australia, Argentina and Brazil are also known to be increasing production, which points to a bright future for the olive oil industry, which is of considerable economic, cultural and agricultural value around the world.

Assaf said: “I am sure that this industry is not one we will let go of lightly. Olive oil is our culture, our heritage, our passion, our lifeline and our love.”


Saudi Arabia, Russia stress need for OPEC+ to commit to deal

Saudi Arabia, Russia stress need for OPEC+ to commit to deal
Updated 08 December 2023
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Saudi Arabia, Russia stress need for OPEC+ to commit to deal

Saudi Arabia, Russia stress need for OPEC+ to commit to deal

RIYADH: Saudi Crown Prince Mohammed bin Salman and Russian President Vladimir Putin stressed in their meeting in Riyadh the need for OPEC+ members to commit to the group’s agreement, Saudi Press Agency said on Thursday, citing a joint statement.
They welcomed the close cooperation between their nations and the successful efforts of OPEC+, of which both are members, to provide stability in global oil markets.
They said it is important that this cooperation continues and stressed the need for all member states to adhere to OPEC+ agreements in a way that serves the interests of producers and consumers and supports the growth of the global economy.
OPEC+ is a group that constitutes the Organization of the Petroleum Exporting Countries and Russia and other allies.
Regarding Sudan, the two leaders stressed the importance of building on the Jeddah Declaration, which was signed on May 11 with the aim of protecting civilians during the conflict in the North African country.
On Iran, Putin welcomed the resumption of diplomatic relations between Riyadh and Tehran and expressed hope that this would lead to enhanced stability and security in the region.
Both sides also stressed their full support for regional and international efforts to reach a comprehensive political solution to the crisis in Yemen.
The two leaders said they were keen to enhance mutual and joint investments in their countries.
They welcomed a 46 percent increase in the volume of bilateral trade in 2022, compared with 2021, and affirmed their intentions to continue to work together to enhance and diversify trade relations.
Turning to the crisis in Ukraine, the Russian side praised the humanitarian and political efforts undertaken by Saudi Arabia.


Saudi crown prince reveals urban plan and branding for Qiddiya City megaproject

Saudi crown prince reveals urban plan and branding for Qiddiya City megaproject
Updated 07 December 2023
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Saudi crown prince reveals urban plan and branding for Qiddiya City megaproject

Saudi crown prince reveals urban plan and branding for Qiddiya City megaproject
  • He says the city aims to be the foremost global destination for entertainment, sports and culture, and to boost the Kingdom’s economic growth, international standing and strategic position
  • Qiddiya’s branding adopts ‘play’ as its main concept, based on research showing this to be vital for cognitive development, emotional expression, social skills, creativity and health

RIYADH: Saudi Arabia’s Crown Prince Mohammed bin Salman on Thursday revealed the urban plan and global branding for Qiddiya City, a massive entertainment project under construction on the outskirts of Riyadh.

The crown prince, who chairs the board of directors of the Qiddiya Investment Company, said the city aims to quickly establish itself as the foremost global destination for entertainment, sports and culture, which will benefit the Kingdom by helping to boost its economic growth, international standing and strategic position, the Saudi Press Agency reported.

It is also designed to improve quality of life, the prince added, and to position Riyadh as one of the top 10 economies in the world.

The investment in Qiddiya is a cornerstone of Saudi Vision 2030, he said, which aims to develop and diversify the Kingdom’s economy, reducing the country’s reliance on oil revenues and creating thousands of job opportunities for Saudi youth.

Qiddiya, which is one of the major projects overseen by the Public Investment Fund, is envisioned as an essential source of support for the Kingdom’s ambitious tourism and economic goals, in addition to improving the quality of life for residents and visitors. It is expected to help attract local, regional and international investors, which will in turn provide support to Riyadh.

Work on the Qiddiya project, in the form of about SR10 billion ($2.7 billion) invested in construction projects, began in 2019.

It was revealed that the branding for Qiddiya will adopt as its main motif the concept of “play,” based on decades of research showing this to be vital for cognitive development, emotional expression, social skills, creativity and physical health.

Studies have also shown the positive effects of recreational activities on society, including their ability to help overcome differences and bridge divisions between individuals, and enhance empathy and social cohesion.

Qiddiya City, described as a one-of-a-kind destination that promises to provide endless fun and excitement for residents and visitors through unrivaled entertainment, sports events and activities, culture and exceptional urban living, will eventually include 600,000 residents and 60,000 buildings in an area covering 360 square kilometers.

It is expected to create more than 325,000 jobs, generate a nominal gross domestic product of SR135 billion a year, and attract 48 million visitors annually.

Located about 40 minutes from the center of Riyadh, overlooking the stunning scenery of the Tuwaiq mountains, Qiddiya City’s attractions will include a gaming and esports district, a motorsports racetrack, golf courses, a massive water park, and the Six Flags Qiddiya theme park. It will also be home to a sports stadium that includes the world’s largest Olympic museum. Its first facilities are expected to open within two years.


Closing Bell: TASI ends green at 11,225 points with $1.62bn trading volume 

Closing Bell: TASI ends green at 11,225 points with $1.62bn trading volume 
Updated 07 December 2023
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Closing Bell: TASI ends green at 11,225 points with $1.62bn trading volume 

Closing Bell: TASI ends green at 11,225 points with $1.62bn trading volume 

RIYADH: Saudi Arabia’s Tadawul All Share Index experienced a slight rise on Thursday, gaining 51.33 points, or 0.46 percent, to close at 11,225.35.   

The benchmark index saw a total trading turnover of SR6.1 billion ($1.62 billion), with 107 listed stocks advancing and 107 retreating.  

Moreover, the parallel market Nomu witnessed an increase of 399.17 points, or 1.70 percent, to end the day at 23,949. The market had 24 listed stocks advancing and 31 retreating.  

The MSCI Tadawul Index also saw an increase, inching up by 4.56 points, or 0.32 percent, to close at 1,439.56.  

TASI’s top performer was Development Works Food Co., which saw its share price surge by 9.92 percent to SR135.20.   

Other significant gainers included Al-Omran Industrial Trading Co. and National Agricultural Development Co., with their share prices rising by 7.99 percent and 5.66 percent to SR37.85 and SR28, respectively. Leejam Sports Co. and ACWA Power Co. also reported strong performances.  

Conversely, Al-Baha Investment and Development Co. experienced a decline, with its share price dropping by 6.67 percent to SR0.14.   

Taiba Investments Co. and Savola Group also faced downturns, with their share prices decreasing by 5.35 percent and 3.38 percent to SR25.65 and SR38.55, respectively. Arabian Pipes Co. and Saudi Reinsurance Co. were among the day’s worst performers.  

On the announcement front, Riyadh Cables Group Co. has completed the second phase of its share buyback program, designed to support its long-term employee stock incentive program.   

The buyback, which occurred between Oct. 31 and Nov. 30, 2023, saw the repurchase of 252,500 shares, amounting to SR18.89 million, at an average price of SR74.82 per share, as per the company’s announcement to Tadawul.  

This step is part of a 12-month plan that commenced following approval at the company’s extraordinary general meeting.

Following this phase, Riyadh Cables’ treasury now holds 282,500 shares, acquired at an average price of SR74.68 each.  

The company has indicated that this buyback process is not expected to have a significant impact on its financial results. This move aligns with Riyadh Cables’ strategy to invest in its workforce while ensuring the company’s continued financial stability and growth.  


Saudi-Vietnamese Joint Committee explores ways to boost trade

Saudi-Vietnamese Joint Committee explores ways to boost trade
Updated 07 December 2023
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Saudi-Vietnamese Joint Committee explores ways to boost trade

Saudi-Vietnamese Joint Committee explores ways to boost trade

RIYADH: Trade exchange between Saudi Arabia and Vietnam is on course to prosper following discussions in a ministerial meeting.  

The fifth Saudi-Vietnamese Joint Committee, taking place in the Asian country’s capital of Hanoi, saw the participation of the Kingdom’s Assistant Deputy Minister for Mining Enablement Abdulaziz Al-Ahmadi, Vietnam’s Deputy Minister of Industry and Trade Phan Thi Thang, as well as joint representatives from several government agencies.  

During the meeting, the two nations reviewed the trade volume between them and expressed their intent to enhance it, broadening the range of exchanged products.  

This aligns with both countries’ efforts in recent years to bolster economic and trade relations.  

During the talk, the officials also discussed implementing support initiatives to facilitate trade exchange by encouraging the exchange of trade missions and participating in the economic activities held in the two countries.

The meeting also shed light on ways to enhance relations and common interests in accordance with the economic, scientific, and technical cooperation agreement concluded in Hanoi on May 25, 2006.

Additionally, both sides discussed increasing the volume of investments in priority sectors between them and elevating partnerships in trade, exports, and investments.

As the assembly concluded, both nations pledged to continue working to develop bilateral cooperation in key areas, including foreign relations, trade, energy, and industry.

Additional sectors included investment, finance, development support, health, as well as education, training, human resources development, media, and justice.

Other areas of interest entailed culture and tourism, security and defense, science, technology and innovation, among others.

The Kingdom is a significant market for Vietnam and a vital partner in the Middle East and Africa.

The region’s exports to the Asian country during 2022 included plastic products, mineral products, and organic chemicals. They also entailed animal food and fish meat preparations.  

Meanwhile, Saudi Arabia’s imports from Vietnam included electrical appliances, equipment and their parts, and metal products. They also included copper and its products, shoes, machinery and tools.    

The Saudi-Vietnamese Joint Committee was established in 2006 to promote cooperation across various sectors for mutual development.


Central Bank of UAE’s assets rise 1.3% to $1.08tn

Central Bank of UAE’s assets rise 1.3% to $1.08tn
Updated 07 December 2023
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Central Bank of UAE’s assets rise 1.3% to $1.08tn

Central Bank of UAE’s assets rise 1.3% to $1.08tn

RIYADH: Total assets held by the Central Bank of UAE rose to $3.95 trillion dirhams ($1.08 trillion) by the end of September 2023, representing a 1.3 percent increase compared to the previous month.

According to CBUAE’s statistical monthly bulletin, this growth in assets was complemented by a 1.4 percent rise in the volume of bank credit, which went from 1.95 trillion dirhams at the end of August to 1.98 trillion dirhams at the end of September.

CBUAE revealed that the surge in bank credit in September was driven by a significant 7.3 percent surge in foreign credit and a modest 0.7 percent increase in domestic credit.

According to the central bank, the domestic credit increase was attributed to a 3.3 percent increase in the public sector, 3.8 percent in non-financial institutions, and a 0.2 percent increase in the private sector.

The report added that banking deposits hit 2.42 trillion by the end of September, representing a rise of 0.7 percent compared to August.

“The growth in total bank deposits was due to an increase in resident deposits by 1.8 percent, overshadowing the reduction in non-resident by 10.1 percent,” said CBUAE in the report.  

Additionally, CBUAE said the monetary base expanded by 0.4 percent from 595.1 billion dirhams in August to 597.3 billion dirhams by the end of September. The expansion included a 0.5 percent increase in issued currency and a significant 13.1 percent rise in the reserve account.

CBUAE added that the overall money supply indicators also witnessed growth in September. M1, which signifies the most liquid form of money, observed a rise of 2.2 percent to 795.5 billion dirhams in September compared to August, while M2, which includes M1 and also less liquid short-term time deposits, grew by 2.6 percent to 1.90 trillion dirhams during the same period.

M3, which comprises M2 and includes less liquid assets and large time deposits, grew by 1.6 percent month-on-month to 2.35 trillion in September.

Earlier this month, CBUAE and Bank Indonesia signed a memorandum of understanding aimed at expanding cooperation across various sectors.

The MoU entails the extension of the already established framework of cooperation between both central banks, which seeks to strengthen their relationship, enhance information exchange, and collaborate across various areas.