Friday, January 30, 2009

Australian hopes on reducing EU tariffs and subsidies dive

The statement ‘My first duty is to support European farmers’ by the European Union Agriculture Commissioner, Mariann Fischer Boel, reported in the Weekly Times is cold comfort for Australian olive oil producers. While not directly referring to olive oil production, it represents a hardening of policies against free trade across the globe as politicians respond to pressure to reverse their slowing economies.

This attitude, as well as the relatively small quantity of oil produced in Australia (less than 1% of world production), would suggest that continuing approaches to the EU to remove imports tariffs and export subsidies for olive oil would be futile until the current financial situation has improved.

The money that supports this lobbying could be better spent on consolidating and expanding the Australian industry, increasing consumption of local product and replacing imports of all classifications of olive oil.

The investment in the promotion of Australian EVOO should be based on its meeting international trade standards and being competitively priced against imports and other competing vegetable oils such as canola.

Simon Field

Coles offer Australian EVOO at $3.99 for 500ml

Coles supermarket is offering its own brand of Australian Extra Virgin Olive Oil for $3.99 per bottle – three dollars less than Woolworths Select Brand ($6.99) in an adjacent Safeway (Woolworths) store. At this price the Coles product is excellent value and undercuts many of the imported brands.

The price comparison of Australian Extra Virgin Olive Oil below was conducted on 30 January at Coles and Safeway supermarkets in the same arcade in a Melbourne suburb.

Coles has 10 Australian EVOO Brands on the shelves while there are 7 on Safeway shelves.

Australian EVOO Brand Shelf price
500ml bottle Coles Safeway

$ $
Coles Brand 3.99
Jingilli 7.50 7.99
ProChef 7.79
Red Island 8.49 7.99
Ollo 8.99 7.85
Cobram Estate 8.99 5.99
Olive Grove 9.25
Woolworths Select

375ml bottle

Viva 5.00 5.24
Always Fresh 5.49 5.49
Cobram Estate 5.99
Kyneton 7.29

Monday, January 12, 2009

Virgin Olive Oil Imports Up, Prices Trend Down

According to Australian Bureau of Statistics data the price of virgin and refined olive oils imported into Australia over the last three years has shown a downward trend. This is good for consumers and not so good for producers.

The import price is generally a benchmark for price setting of olive oils in Australia. Although there is no data available for Australian prices, it is reasonable to assume that the prices will follow the trend of imported olive oils if they are to be competitive.

The graph below shows that since the 2005/2006 financial year the price of virgin olive oils has dropped from $6.04/kg to $5.14/kg in 2007/2008 for packaged olive oil and from $7.48/kg to $5.28/kg for bulk. The first five months of the current financial year have shown a slight increase for packaged olive oil to $5.30/kg while bulk has continued to fall to $5.22/kg.

In the three year period imports of virgin olive oil have risen by 26.82%.

The price trend for refined olive oil is also downward with the price for packaged products declining from $5.59/kg in 2005/2006 to $4.89 in 2007/2008. A slight rise to $5.20/kg is shown for the first five months of the current financial year. Bulk refined olive oils dropped from $5.55/kg to $4.37/kg over the same period with a slight rise to $4.62 to November this year.

The volume of imported refined oils has declined by 9% during the three year period. This is reflected in the decline of the proportion of refined olive oil imported from 61% in 2005/2006 to 52% in 2007/2008

Simon Field
Olive Business

Thursday, January 8, 2009

World Olive Oil Prices Down, Crop Estimates Up / Australian Import Prices Rise

World Olive Oil Prices Down, Crop Estimates Up

In its latest market commentary the International Olive Council reports that olive oil prices are continuing to fall.

Compared with the same time last year the prices for extra virgin olive oil were 14% lower in Spain, 22% lower in Italy and 30% lower in Greece.

At current exchange rates the Jaen (Spain) price of €2.19/kg for extra virgin olive oil in November converts to AU$4.56/kg or AU$4.15/litre.

The prices for refined olive oil were also lower by 16% in Spain and 11% in Italy. The Jaen ex-refinery price is €2.19/kg, the same as the extra virgin price.

Estimates for the 2008/2009 suggest that 2.866 million tonnes of olive oil will be produced, 202,000 tonnes more than last year.

Australian Import Prices Rise

According to the Australian Bureau of Statistics data, packaged virgin olive oil import prices increased by 9% from November 2007 to November 2008 to AU$5.54kg or $5.04/litre. Bulk prices rose by 33% to 5.87/kg ($5.34/litre).

Packaged refined olive oils rose 21% to $5.61/kg ($5.11/litre), with bulk refined oils rising by 20% to $4.91/kg (4.47/litre).

This substantial rise in prices cannot be attributed to currency exchange rates as the value of the Australian dollar in comparison to the Euro in November 2007 was the same as November 2008 at 0.60 Euro to the dollar.

Simon Field
Olive Business