Olive oil supply is set to suffer as a scorching summer in Europe cripples production, and domestic producers are conversely impacted by mild weather.
Prices are already at an “all-time record” high and are set to increase — but Australia’s olive industry said that’s not necessarily a bad thing.
Australia imports about 30 million litres — more than half of its olive oil supply — from countries including from Spain, Italy and Greece, which cover more than 60 per cent of global olive oil production are are currently being slammed by drought.
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Australian Olive Association CEO Michael Southan told 7NEWS.com.au: “They’ve had a couple of years now of drought.”
The “highs and lows of agriculture production and prices” are cyclical, Southan said, but he added: “Because the Northern Hemisphere has been so impacted in the past few years, we haven’t really seen it to this extent with olive oil before.
“We’re not unfamiliar with drought here in Australia, but in the Northern Hemisphere, in the Mediterranean … it’s really affected the agricultural production. Olives are not immune to that.
“Those imports come in, and they’re sold under various brands, which go up against our premium Australian-grown and Australian-produced extra virgin olive oil.”
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Because Australia is such a small producer of olive oil, the nation’s prices are indexed against international prices.
“World olive oil prices have hit an all-time record these last few weeks, which flows through,” Southan said.
The price of extra virgin olive oil from Spain was up 87 per cent in June, when compared with the same time last year. Extra virgin olive oil from Italy was up 62 per cent, and extra virgin olive oil from Greece was up 73 per cent, according to International Olive Council’s latest July figures.
Global olive oil prices are already at record highs, as weather conditions affect both domestic and international supply. Credit: Getty Images
Southan said: “It’s affecting the price of what’s imported.”
But while it causes an extra strain on Australian hip pockets, Southan added that it’s actually a blessing for Australian growers.
“The great thing for our producers in Australia is that they can ride on those increased prices,” he said.
But not all Australian growers will be able to capitalise on the increased prices equally because growing conditions on the east coast of Australia have also hindered domestic supply.
“What we saw last summer was just cool conditions. We had very good conditions during flowering but, because of the mild summer in the eastern states, the fruit was just very slow to ripen, and the oil accumulation wasn’t as high,” Southan said.
“So what we’ve found is that while the yields of olives have been good, the actual oil yield has been a bit low.
“This is not the case in Western Australia or South Australia, so it’s only affected part of the country.”
Southand said the Australian industry has “a bright future ahead” but, while local growers might be looking at long-term strategies to expand production, bringing crops to commercial maturity can take nearly a decade.
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