Fund Deduction Revived in Turkish Olive Oil Exports After 26 Years
Turkey has announced that it will reintroduce a 20 cents per kg Support and Price Stabilization Fund for exporting olive oil in bulk and barrels. This decision marks a pivotal shift in Turkey’s export practices for one of its most significant agricultural products.
A Look Back
The withholding of funds in olive oil exports was abolished on March 19, 1997. Since then, Turkey has pursued a free-trade approach towards exporting olive oil, unhindered by additional fund deductions. However, recent economic conditions, industry developments, and policy changes have prompted a re-evaluation of this strategy.
The New Regulation
On July 19, 2023, an amendment to the Decision on Support and Price Stabilization Fund was published in the Official Gazette. This amendment reinstates the practice of withholding funds in olive oil exports, setting a rate of 20 cents per kg on exports of olive oil in bulk and barrels.
The decision, signed by Deputy President Cevdet Yılmaz, aligns with Law No. 2976 on the Regulation of Foreign Trade. The law is designed to streamline the regulation of foreign trade, considering both domestic economic conditions and international trade dynamics.
Implications of the Decision
The implementation of the Support and Price Stabilization Fund will have a substantial impact on the dynamics of Turkey’s olive oil export sector. This fund withholding could influence the price competitiveness of Turkish olive oil in international markets, which may lead to shifts in export volumes and the global market share of Turkish olive oil.
However, it also provides an opportunity for domestic olive oil producers. The collected funds could support local industry, providing incentives and backing for Turkish olive oil production. This might enhance the quality and marketability of the domestic product, which would be advantageous in both local and global markets.
While exporters will feel the immediate consequences of this decision, the long-term effects could transform the Turkish olive oil industry. This move is seen as an essential step towards creating a more sustainable and resilient olive oil sector in Turkey, which can navigate the complexities of global markets while safeguarding the interests of local producers.
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