The import prices (cv) for packaged virgin olive oils into Australia during March declined for the first time in 4 months while the bulk price continued to decline.
The average price for packaged virgin olive oils dropped to 8.5% to $5.63/litre and bulk virgin olive oil dropped 5% to $4.79/litre.
The falling prices can be expected to continue with an improving Australian dollar, weak prices in Europe and the global financial crisis slowing the movement of stock.
The lowering of import prices will continue to put downward pressure on prices of Australian olive oil.
Source: Australian Bureau of Statistics
The graph below shows a steep downward trend in producer prices for extra virgin olive oil in the European markets which set the prices for international trade.
The upside is that the reduction in price of olive oil will encourage consumers to increase consumption. Another positive is that with lower production of competing vegetable oils through application of less fertiliser, and sustained consumption driven by more fried food being consumed in China and palm oil being used to generate electricity, the price of vegetable oils may well increase. This could mean olive oil increasing its share of the international edible oil market.
The futures exchange in Jaen Spain, Sociedad Rectora del Mercado du Futuros del Aceite del Oliva SA, Jaen (MFAO) shows that there is little confidence in prices increasing over the next year with quotes as low as €1585 per tonne. This price is well below the price of production and converts to €1.44/litre (approximately AU$2.88/litre).