Program Overview

Background and Long Term Strategies

Over the past three years, world consumption of olive oil has exceeded world production by an average of 60,000 tonnes per year.

• This balance led to the current situation of historically low oil reserves as a percentage of total consumption.
• World olive oil consumption by volume did not decrease during the Global Financial Crisis.

World commodity olive oil prices are expected to remain the same with little change possibly following a slightly upwards trend.

The biggest issue facing olive growers worldwide is the almost equal price that is paid for bulk trades of oil of all grades - extra virgin, virgin, lampante, refined or refined pomace oil. This puts a floor under olive oil trades that penalises quality, and rewards lower grades. In summary olive oil producers are generally not being rewarded for quality. The only explanation for this is the ready substitution between refined and extra virgin olive oils in the retail marketplace. However, consumers are starting to matter more on the global scene.

The concept of ‘fresh' olive oil has been emerging in response to the unfortunate dominance of bland and low grade deodorised, refined or old olive oils being sold widely as extra virgin. The term ‘fresh' is being discussed widely and now underpins retailer quality requirements in much of Europe and to some degree now in Australia. RIRDC has been supporting the science behind organoleptic methods in conjunction with industry, government and commercial interests. This is the basis of the Certified Australian Extra Virgin branding and the consumer education work.

An Australian standard for olive oil is currently under discussion. This standard will allow for the natural variations in olive oil chemical makeup, while at the same time defining the consumer oriented developments mentioned previously, as well as imposing better methods to detect the adulteration of olive oil.

Increasing crops in most regions resulted in a record Australian olive oil crop of about 15,000 tonnes for 2009. Trees planted over the last decade are maturing and producing more than before on many orchards.

Key long-term strategies 

• Reduce costs; improve orchard/processing efficiency
• Improve yield and quality of product
• Improve market access
• Ensure environmental responsibility
• Respond to challenges of climate change
• Enhance the human capital of the industry and consequent research knowledge and adoption.