Olive oil prices across all classifications are down and recent International Olive Council data shows that imports into major importing countries such as the USA, China and Australia are down. Even in Spain, the world’s largest producer, there are reports of reduced consumption of olive oil, with the exception of extra virgin olive oil which has shown a slight rise. The data provided generally measures the tonnage of olive oil traded, data of value of oil traded is scarce. It may well be that while tonnage is down, value may be up indicating the higher price and volume of extra virgin olive oil sold.
The downward trend in olive oil trade by tonnage can be for a number of reasons.
Perception
The perception of the value and integrity of olive oil among consumers has been affected by the publicity concerning allegedly fraudulent trade in olive oil publicised across all media. Confused, consumers are turning to other vegetable oils for their household needs.
Polyphenols
The trend towards higher polyphenols in extra virgin olive oil, pushed as a measure of quality and shelf-life by some producer associations, is resulting in a product which tastes too bitter and ‘hot’ for most consumers.
Price
The dual trends of increased production of extra virgin olive oil worldwide and the demand for higher prices from producers is setting prices too high for consumers with diminished disposable income.
Production
All the above is leading to an oversupply of olive oil, especially the higher priced extra virgin olive oil. This in time should lead to a reduction in price to consumers and increased consumption. Producers may not be happy with this and need to adjust production costs – perhaps harvesting a little later to increase yield and produce a greater range of less robust extra virgin olive oil for consumer palates.
The downward trend in olive oil trade by tonnage can be for a number of reasons.
Perception
The perception of the value and integrity of olive oil among consumers has been affected by the publicity concerning allegedly fraudulent trade in olive oil publicised across all media. Confused, consumers are turning to other vegetable oils for their household needs.
Polyphenols
The trend towards higher polyphenols in extra virgin olive oil, pushed as a measure of quality and shelf-life by some producer associations, is resulting in a product which tastes too bitter and ‘hot’ for most consumers.
Price
The dual trends of increased production of extra virgin olive oil worldwide and the demand for higher prices from producers is setting prices too high for consumers with diminished disposable income.
Production
All the above is leading to an oversupply of olive oil, especially the higher priced extra virgin olive oil. This in time should lead to a reduction in price to consumers and increased consumption. Producers may not be happy with this and need to adjust production costs – perhaps harvesting a little later to increase yield and produce a greater range of less robust extra virgin olive oil for consumer palates.
