Olive Oil Production Continues Decline Against Other Vegetable Oils

Updated data from the USDA shows that the percentage of olive oil produced continues to decline as a proportion of total vegetable oil worldwide. In six years since 2007 the percentage has dropped from 2.4% to 2.0%.

East Coast Biggest Users of Olive Oil in USA

In an analysis presented to Savantes New York in February, Eryn Balch, Executive Vice President of the North American Olive Oil Association, revealed that the Eastern States consume 54% of all classifications of olive oil in the USA.

Based on the US Census Divisions, the data showed the consumption as New England Division – 9%, Middle Atlantic 23% and South Atlantic 22%. By comparison the West Coast which is covered by the Pacific Division consumed 10%.

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.

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 (www.oilworld.biz) 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)

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.