Olive Oil Overview 2020

29 Dec Olive Oil Overview 2020

Australian Olive Oil – An Overview 2020

Peter McFarlane, AOA OliveCare® Code of Best Practice Administrator

Global production of olive oil:

The top producers of olive oil by country[1] are (1000s tonne):

[1] International Olive Council (IOC): https://www.internationaloliveoil.org/what-we-do/economic-affairs-promotion-unit/#figures

_{1 International Olive Council (IOC) – November 2020}

_{Ref: https://www.internationaloliveoil.org/what-we-do/economic-affairs-promotion-unit/#figures}

_{2 Australian Horticulture Statistics Handbook 2018/19 (Hort Innovation)}

 Australian olive production snapshot:

• Olives are grown throughout temperate South Eastern and South Western Seaboard regions of the continent. However, two regions in particular account for an estimated 70 per cent of Australia’s current production i.e. north-central Victoria and north of Perth Western Australia.
• Australian Industry estimates around 10 million trees are grown on 450 commercial groves covering more than 30,000 hectares, with 70 per cent of the olive trees concentrated in 20 groves (Large Enterprise Group).
• Australian olive oil production in the 2020 production season is estimated at 8,800 tonne (9.6 million litres), only half that produced in the 2019 season at 19,736 tonne (21.5 million litres) processed from 118,750 fresh tonne, which in turn was up from the 9,390 tonne (10.3 million litres of oil from 52,165 fresh tonne in 2018 (AOA data), clearly demonstrating the biennial bearing pattern of olive production in Australia.
• Australian olive oil production represents only 0.6% of total global production which for the 2018/19 year was 3,131,000 tonne of olive oil produced from 10 million hectares.
• Australian consumption of EVOO has risen from 63% of olive oil sales in 2017 to 65% in 2019. The key drivers of this growth are health and quality.
• Imports of olive oil in 2018/19 was 33,274 tonne (36 million litres) and increase in ‘off’ crop years of Australian production.
• Australian apparent consumption of olive oil in 2019 was 50,707 tonne (55 million litres). This equates to consumption of 2.1 litres per person per annum.
• Australian olive oil production is typically 85% to 90% EVOO classification, depending on seasonal events – in contrast to Mediterranean production where only 25% is EVOO, 25% VOO, and 50% Lampante (requiring further processing) classification.

 Major Exporters of Olive Oil:

The top exporters of olive oil by country¹ are (1000s tonne):

_{1 International Olive Council (IOC) – November 2020}

_{Ref: https://www.internationaloliveoil.org/what-we-do/economic-affairs-promotion-unit/#figures}

_{2 Australian Horticulture Statistics Handbook 2018/19 (Hort Innovation)}

Australian olive oil exports² in the 2018-2019 reporting period was 2,304 tonne, with a total value of A$16.1 million, which represents 0.25% of global imports.

Major importers of olive & olive pomace oil:

The top importers of olive oil by country¹ are (1000s tonne):

_{1 International Olive Council- November 2020}

_{Ref: https://www.internationaloliveoil.org/what-we-do/economic-affairs-promotion-unit/#figures}

_{2 Global Trade Atlas 2020 (Hort Innovation)}

Olive oil imports to Australia:

The top source countries of olive oil to Australia by country² are (1000s tonne):

_{2 Global Trade Atlas 2020 (Hort Innovation)}

_{Ref: IOC Import profiles 2018/19 – Australia: https://www.internationaloliveoil.org/wp-content/uploads/2020/04/IOC-Import-profiles-Australia-2018-19-rev.1.html}

According to Hort Innovation data, Australia imported between 20,000 and 33,000 tonne of olive oil in each of the last 5 years, reaching 32,936 tonne in the 2018/19 reporting year, or 3.4% of world imports. Australian ranks as the 8^th largest importer of olive oil.

Spain stands out as the main supplier to Australia in the 2018/19 reporting period, with 72% of the imported volume (23,657 tonne), followed by Italy with 18% (5,824 tonne), Greece with 6% (1,519 tonne), Turkey with 2% (649 tonne), Tunisia with 1.6% (525 tonne), Lebanon with 1.2% (405 tonne). The remaining source countries total 2.1%.

Weekly olive oil prices:

Australian domestic and export market conditions remain challenging with Australian supermarket shelves dominated by cheap imported olive oil products.  However, the Australian Dollar (A$)[1] has further depreciated against the euro (EUR) from a high of 0.73 in February 2017 to a fairly stable 0.62 during 2020 (apart from a COVID-19 dip in March 2020!).  The lower Australian Dollar serves to make imports more expensive, exports more competitive, and applies upward pressure on domestic wholesale prices.

_{[1] OzForex: https://www.ofx.com/en-au/forex-news/} 

Market share:

Pleasingly Extra Virgin Olive Oil (EVOO) now enjoys 46% of the Australian Retail Sales Value (RSV)[1] of the cooking oil category, with refined olive oil at 17%, making total olive oil sales 63% of the RSV.  This exceeds its competitors with seed oils having 24% of the RSV, and the much hyped coconut oil at only 4%.  The growth in the EVOO category means it is important for industry to monitor the market to ensure consumers are actually getting what they believe they are purchasing.

_{[1] IRI Scan Data, Australian Grocery, MAT 16/8/20.}