A SA Olive Industry Situational Analysis has been prepared to give a broad overview of the global and Australian olive industries and to provide a more detailed analysis of the South Australian olive industry as of late 2005/early 2006.

There have been other studies completed for the Australian olive industry (see Links below).  This SA Olive Industry Situation Analysis has compiled and summarised information from some of these studies, highlighting many of their key points and recommendations.  The information from this report has underpinned the SA olive industry strategic planning process in 2006.

The following are a few key points to arise from the analysis.

Trends in the Global Olive Market

The 2004/05 world olive oil and table olive production was 3.0 million tonnes and 1.7 million tonnes respectively.  Consumption of olive oil and table olives in 2004/05 was similar to production.  However, end of season stocks for olive oil was more than considered necessary to cover bridging requirements.  The average price received for extra virgin olive oil and refined olive oil in the main European markets over the last few years has been about Aus$4/kg, with little difference in the price paid for the higher quality extra virgin olive oil.

Although production levels have been lower than average in 2005/06 due to seasonal conditions, both world olive oil and to a lesser extent table olive production is increasing in the longer term and promotion to increase consumption is essential to avoid major oversupply problems.  These figures indicate that Australian producers will find it difficult to compete against the world on a commodity based market and will need to differentiate their product and focus on new or niche markets that may be more profitable.

The Current State of the Australian Olive Industry

The Australian consumer is becoming increasingly aware of the virtues of olive oil, including the reported benefits to human health, such as lowering cholesterol levels.  Olive oil is particularly healthy due to the presence of mono-unsaturated fats and anti-oxidants, factors believed to link the Mediterranean diet with one of the lowest cardio-vascular disease rates in the world.  As well, Mediterranean cuisine has become very popular in Australia.

Consequently, consumption of olive products by non-traditional consumers in Australia has greatly increased.  In 2004, Australia imported 32,629 tonnes of olive oil and 13,710 tonnes of table olives, valued at $149 million and $47 million respectively.  Imports and consumption of olive oil and table olives have nearly doubled over the last 10 years.

About 9 million trees have been planted in Australia since 1992 and in 2004 the Australian olive industry produced about 2,500 tonnes of olive oil and in 2005 about 5,000 tonnes of olive oil and about 1,000 tonnes of table olives.  By 2010 Australia could be producing 30,000 tonnes and may reach in excess of 40,000 tonnes of olive oil by about 2015 before production levels out.  Therefore, by 2010, Australia should be producing as much olive oil as it currently imports.  The majority of production in Australia is for Extra Virgin Olive Oil although that is only 25% of the current import market.  However exports of Australian olive oil are rapidly increasing.  In 2005 Australia exported 1,651 tonnes of olive oil, about 33% of current production, valued at about $9 million, more than triple that of 2004.

The Current State of the South Australian Olive Industry

A desktop audit has shown that in SA there will be about 2 million olive trees with a potential production of about 10,000 tonnes of olive oil and 6,000 tonnes of table olives within 8 years.  The regions with the most trees include Limestone Coast, Riverland/Mallee and Fleurieu Peninsula, with about 500,000 trees each and Northern Adelaide Plains with about 250,000 trees.

The current and future processing capacity appears adequate for olive oil although insufficient for table olives, particularly in the Limestone Coast and Fleurieu Peninsula regions.  There also appears to be a major shortfall in current and future olive oil storage facilities, particularly in the Riverland and Mallee, Fleurieu Peninsula and Northern Adelaide Plains regions.

Contact:  Susan Sweeney

Links

South Australian Olive Industry Situational Analysis (.PDF) 803KB
Structure of the South Australian Olive Industry - Economic Analysis (.PDF) 918KB
Loyalty Factor - Olive Oil Market Report (select 'Sector Strategic Plans' then 'Olives' on the left hand side of the page) (EXTERNAL SITE)