In terms of value added, olive oil is one of the most important agricultural commodities in Tunisia. It is also the most important agricultural export commodity. Tunisia ranks second to Spain in world olive oil exports. Currently these exports account for about 20 percent of total export earnings of Tunisia. This is equivalent to about 40 percent of total agricultural export earnings. Tunisia is by far the largest olive oil producing country in North Africa and the Middle East and ranks sixth among the world's producers of olive oil. Considering the adaptability of the olive tree to the climate and soil conditions of Tunisia, olive culture is expected to maintain its importance in Tunisian agriculture. However, the economic benefits which could be derived from the olive oil sector will be directly affected by national policy regarding marketing and pricing of the commodity. In particular, the role that prices play in providing necessary incentives to induce technological change in production and marketing should not be underestimated.