Olive oil has been consuming in the West for many decades, but in China, it has just started at the end of 90’s.

The entry of foreign olive oil brands into China market took place at the beginning of the 2000s.

China imported about 400 tons of olive oil in 2001, while it was just 150 tons in 1998.

But now, by importing 45,000 tons of olive oil in 2016, China has become Asia’s biggest olive oil consumer.

Olives are grown mostly in countries bordering the Mediterranean Sea.

Some regions of China are also suitable for olive tree planting.

Olive trees in China are mostly planted around the Yangtze, Bailong, and Jialing Rivers.

80% of the olive groves are in the Longnan area of Gansu province. China currently has 175 thousand acres of olive groves. By the end of 2016, just 5,600 tons of olive oil was produced.

In 2016, Turkey`s exports of olive and olive oil were $ 190 million. In 2017, it soared to $ 323 million. However, in contrast to last year`s rapid increase, olive and olive oil exports to China again remained below $ 1 million.

Although local entrepreneurs started to grow olive trees, China is still dependent on imported olive oils. After China`s accession to WTO in 2001, China reduced tariff rates on olive oil by 10%. Thus the Chinese market was opened up to foreign producers.

The consumption of olive oil is increasing as the Chinese care more about their health. Local entrepreneurs have begun to give more importance to olive grove cultivation and olive oil production.

Because of olive oil is an expensive product, people of cities with a better economic condition, such as Beijing and Shanghai, mostly prefer to buy.

Per capita, olive oil consumption is well below countries like Spain, Italy, and Greece. The sum of soybean oil and peanut oil consumption in China is about 20 million tons per year. The consumption rate of olive oil among vegetable oils are only about 3%. Those imply there is significant growth potential regarding total consumption and per capita consumption. Therefore, China is seen as the world’s largest market by global olive oil producers in the future.

In 2016 compared to the previous year, the volume of retail sales of olive oil in China has increased by 14.19% to 37,700 tons. In terms of value, it reached 3.87 billion yuan ($ 627 million).

The US is the world’s biggest olive oil importer. According to the US Department of Agriculture, the estimated olive oil import of 2017 is 322 thousand tons, while EU ranks second with 160 thousand tons. China ranks six with 45 thousand tons (43 thousand tons according to Statista).

If China’s huge population and income increase be taken into consideration, it can be said that China’s olive oil consumption will surpass the US within the bounds of possibility.

Spain is dominating the market for exporting olive oil to China. Spain has a market share of 80%, Italy is 13%, and Greece is 2%. The remaining 5% shared between Australia, Tunisia, Morocco and Turkey.

In 2017 Italy’s olive oil export to China boomed particularly. Olive oil exports increased by 40 million euros ($ 49 million) compared to the previous year. This figure is 41% higher than last year.

One of the reasons for the increase is the Chinese tourists. According to the National Statistical Institute of Italy, Italy welcomed 1.4 million Chinese tourists in 2017. Thus interest to Italian product has also increased.

The increase is not only connected to this reason. China decreased the import tariff on olive oil at the end of 2016. Although competition has intensified competition among producers, China’s imports have also boosted. It seems Italy enjoyed with that. Another reason is the drought that deeply affects Spain, the world’s largest olive producer. The decline in the production of Spain strengthened the other countries’ hands.

The annual output of Spain’s production fell from 1.7 million tonnes to 1.2 million tonnes, that also gave a critical chance Turkey to boost its olive oil export. Turkey exported the highest amount of olive oil in the 2012/2013 season with 92 thousand tons. This year, Turkey expects to break its own record with 100 thousand tons.

But there is a problem.

The figures show us that 2017/2018 season is not going bad. The volume of olive and olive export meets the expectations. Although olive and olive oil exports boosted from $ 190 million to $ 323 million in 2017, olive and olive oil export to China didn`t increase.

The question comes at this point.

In 2016, Turkey`s exports of olive and olive oil were $ 190 million. In 2017, it soared to $ 323 million. However, in contrast to last year`s rapid increase, olive and olive oil exports to China again remained below $ 1 million.

The sector had seen the below of $1 million in 2006. In 2013, it was even close to $ 5 million. It is evident that the sector suffered a huge decline in the Chinese market.

The same goes for this year. Even if Turkey`s olive oil can`t make a good job in the Chinese market, there is an increase in total exports since the season started.

That result may occur because of Orkide – a major olive oil producer in Turkey-. In 2013, The company eagerly entered the Chinese market, but it seems sales don’t go as expected. The problems faced by the management team of the company may have caused this result. It may not be true to link the declining to a single company.