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.

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: http://www.oliveoiltimes.com/olive-oil-basics/pompeian-usda-olive-oil-monitoring/25740

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)

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.

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.