Monday, October 29, 2012

USA Short on Cost Effective Olive Oil Testing Facilities

For many Savantes participants the session on defects in olive oil was their first exposure to the full range of faults in olive oil. It was evident in the discussions that ensued that enterprises were committed to putting in place or enhancing in-house tasting panels and quality control systems. It was also apparent that there was a general lack of cost-effective, internationally accredited and independent testing facilities in the US.

There was a small percentage of olive oils presented for tasting which had possible defects, the suppliers of these oils will be informed of this with the suggestion that the oils be submitted to internationally accredited tasting panels for confirmation or otherwise of the extra virgin classification on the labels. In keeping with the international convention that these oils be classified by accredited panels, Savantes does not reveal the brand of the oils to participants to protect the integrity of the brand until the quality is properly and independently assessed.

Friday, September 14, 2012

Spanish Olive Oil Production Down, Prices Up, Consumption Steady

Drought has affected the Spanish olive crop and forecasters estimate a 30-40% reduction in olive oil yield for the coming harvest. However, this drop in production is to some extent counterbalanced by carryover stocks from the previous record harvest.

International Olive Council data shows in 2011/12 production exceeded consumption. The shortfall in the Spanish crop is expected to return the balance between production and consumption.

Olive oil is part of a group of oils used in cooking and salad dressings. According to forecaster Oil World ( production of these oils will fall up to 18% in the next year.

In anticipation of these shortfalls olive oil prices have jumped significantly. According to Oil World, ‘Domestic prices in Spain for extra-virgin olive oil rose 40 percent from June to about 2,400 euros  a ton in September last week, and could surpass the previous March 2008 high of 2,633 euros to climb to at least 2,800 to 3,000 euros a ton’.

Italy’s olive-oil production, the world’s second-largest, is seen climbing to 540,000 tons from 518,000 tons, while output in Greece may advance to 355,000 tons from 335,000 tons’.

World consumption of olive oil is forecast to stagnate in 2012-13 after climbing for six consecutive years.  “It can be expected that consumption of olive oil will be affected by the prospective high prices and the widening of the price premiums relative to sunflower oil and other vegetable oils,” according to Oil World. (Source Bloomberg and Oil World)

Monday, August 6, 2012

Olive Oil Production Exceeds Consumption

The depressed state of the world trade in olive oil can be partially explained by the simple dynamics of supply and demand. According to the statistics published by the International Olive Council, supply of extra virgin olive oil exceeds demand. This has led to low prices and storage of olive oil in Spain in an attempt reverse the supply/demand situation. However, the stored extra virgin olive oil will deteriorate and its release into the market will increase the availability of lower grade olive oil selling at lower prices and competing with extra virgin olive oil.

Olive Oil Imports into Australia Steady

The imports of olive oil into Australia have remained steady over the same periods in 2011 and 2012 according to International Olive Council data. Dips in import volumes prompted some comments in the media that the cause was the inroads made by locally produced oils. However, the comparatively low imports in the last three months of 2011 were balanced by increased levels in the first three months of 2012.  Over this period the level of imports is steady at just under 3,000 tonnes per month.

Small Gains in Local Oil Consumption in Australia

Analysis of International Olive Council data shows that the percentage of locally produced olive oils sold in Australia has risen approximately 4% over the past 5 years. Consumption of local oils remains at a low level of 27%, despite major publicity campaigns encouraging consumers to buy local and persistent unqualified attacks on the quality of all imported olive oils.

Per Capita Consumption of Olive Oil Increases in the USA

Per capita consumption of olive oil in the USA continues to rise (USDA, World Bank and IOC data). Over the five years from 2007 to 2011 consumption has increased from 0.82 litres per person to 0.88 litres. Most of the olive oil is imported making the US the largest importer outside the European Union. Local production, mainly from California, produces approximately 2% of consumer requirements.

Friday, June 8, 2012

Quality Standards and Labelling are Separate Issues

The Australian Competition and Consumer Commission has demurred from using the ‘Australian Standard’ for olive oil in pursuing prosecutions for alleged non-compliance. Perhaps it is time for the proponents of the standards to separate the multiple aims and deal with them sequentially.

The sections of the standards dealing with labelling can be dealt with first, while those that deal with quality can be pursued separately.

Olive Oil Consumption Drop in Greece and Italy

Olive oil is losing ground to cheaper vegetable oils in its heartland, the major producing countries Greece and Italy. Reported by the British Independent newspaper, The International Olive Council reports that olive oil consumption in these two countries is down to 1995 levels while Spain is holding steady. The consumption drop is attributed to consumers switching to cheaper vegetable oils.

Wholesale Olive Oil Prices Lowest in Years

According to the International Monetary Fund, wholesale extra virgin olive oil prices in Europe have halved since 2005 and are back to 2002 levels. The price drop is caused by bumper harvests in Spain and reduced consumption in Europe. In an attempt to stop the price slide EU producers have been assisted in storing the surplus olive oil.

Time to Test Olive Oils against Other Vegetable Oils

One must question the logic of the continuous assault on imported olive oils that is taking place in Australia, New Zealand and the United States. While the main reason promulgated for this New World campaign is to increase the quality of olive oil supplied to consumers, many see it as a thinly disguised attempt to increase the sales of locally produced extra virgin olive oils. 

With the global access to local news and commentary, the danger of this approach is that the global brand of olive oil is permanently damaged and it will take more than a few new producing countries to repair the damage. The sales of olive oil are very price sensitive as we are seeing in Greece and Italy.

It is time we as an industry encouraged the comparison of the positive attributes olive oil – refined and extra virgin – with other vegetable oils, and in doing so, boost the global olive oil brand rather than tainting it.

Friday, April 13, 2012

Large importer of olive oil into the US first to join quality programme.

Pompeian Inc, one of the largest importers of olive oil into the United States, has become the first company to participate in the USDA quality programme for olive oil.

Reported in the Olive Oil Times, the move is the first direct response to efforts to improve the quality of olive oil available to consumers in the US.

Interestingly the first company to join the voluntary standard regime is an importer and the comment facility which follows the article in the Olive Oil Times is empty. Usually there is a lot of chatter following reports on quality – ironically this perceived win has failed to attract any accolades.

Read the article:

Thursday, April 12, 2012

Olive oil imports into Australia back up again.

Imports of olive oil into Australia in January 2012 increased by almost 1200 tonnes
compared with the same month in 2011. This follows substantial dips in imports in November and December.

Overall imports into Australia dropped by 10% in the four months to January 2012. Canada showed an 18% decrease in imports and the USA a 10% increase over the same period.
(Source IOC)

Spanish olive oil production at record levels as prices hit record lows

The Spanish Olive Oil Agency reports that Spanish olive oil production during 2011/2012 has all previous levels and is 185,000 tonnes above the level of the previous year. Spain produces approximately 50% of the world’s olive oil.

Prices for extra virgin olive oil are down 13% in Spain (€1.75/kg) and 28% in Italy (€2.35/kg).
(Source IOC)

Monday, March 19, 2012

Sharp Decline in Olive Oil Imports into Australia

Olive oil imports into Australia declined sharply in the last two months of 2011 according to data released by the International Olive Council.

In November 2011 imports declined by 14% with an even sharper decline of 55% in December 2011. No explanation was offered for the sharp decline. Imports also declined by 7% in Canada during the same period.

China and Russia showed substantial increases in imports, with Japan, Brazil and the United States showed smaller increases.

Monday, January 9, 2012

Australian Olive Oil Sales in Recession

According to the Retail World Annual Report for 2011, candy sales, including chocolate, have grown 5.4% in value, as have chewing gum and other ‘refresher’ sales – up 3.1%. Herbs and spices are up 4.9%.

Not so with olive oil where sales have dropped 10% in value and 1.8% in volume during 2011.

The annual report summarises the sales through Coles, Woolworths and Metcash.

The olive oil sales totalled $247.4million. Extra virgin olive oil made up 58.4% of this total with extra light at 21.3% and pure olive oil at 20%.

Imported olive oil totalled 77.1% of sales, with Australian produced olive oil making up the balance of 22.9%.

Conga foods was the market leader with 36.2% of olive oil sales by value, followed by ‘Private Label’ at 16.3%, Minerva at 15.7% and Cobram Estate at 9.4%.

The seeded oils category, which covers the other vegetable oils that compete with olive oil also declined in value by 3.8%, 2.2% by volume.

Perhaps we can boost olive oil sales by increasing its use in the manufacture of chocolate and other candies!

More seriously, the downward trend is concerning and the reasons for it must be analysed and an industry response implemented. Some possible causes are:
  1. The higher price of olive oil compared with competing fats such as vegetable oil and butter.
  2. Consumers heeding dieticians’ advice to reduce fat consumption (while ignoring advice to consume less sugar based candies!).
  3. The negative publicity concerning olive oil fraud and mislabelling resulting in a loss of confidence in olive oil products in general.
  4. Consumers shifting to cheaper butter for cooking as has occurred in Spain to a small extent.