AUS: Australia's olive industry

Rural Industries Research & Development Corporation

Stuffed, pitted or squeezed: The good oil on Australia's olive industry

20 August 1999

Olives are one of Australia's new sunrise industries, with groves being planted across the country almost every day.

But a new report released today by the Rural Industries Research and Development Corporation (RIRDC) warns the industry could be squeezed by increased world production which, for the first time this year, will exceed consumption.

It found Australia's projected olive harvest would jump from 2500 tonnes this year to between 37,500t and 52,500t by 2006 as producers attempted to cash in on the $110 million worth of olive products imported into Australia every year.

However the growth in domestic production will coincide with increased production in major Mediterranean countries as they modernise the traditional industry.

The report uses secondary market data from major olive producing countries, including Australia, and primary data on domestic consumption trends from a survey of 1000 people in Sydney, Melbourne and Brisbane.

Researcher Edith Gomez, of the Department of Primary Industries, Queensland, said the report gave an insight into the prospects for the olive industry from an international perspective.

She said producers had to recognise olives, and particularly olive oil, were traded as international commodities and subject to the laws of supply and demand.

There was concern that world olive production had exceeded world demand for the first time. If demand did not increase and production continued to rise, a depressed world market was expected with lower prices.

But, there were opportunities in domestic markets which are almost entirely made up of imported products.

"Australian consumption has grown in the past 10 years from a $30 million market in 1988 to $110m in 1997," Ms Gomez said.

"To obtain a 20-40 per cent proportion of this market within 10 years, in line with the projected domestic tree plantings, will be an onerous task that will require the development of strategic production, processing and marketing plans.

"Endeavoring to attain more than 50 per cent market share, as may be the case with virgin olive oil, may require an exceptional business plan involving the whole industry."

The report concludes by calling on the industry to take a unified approach in association with importers, distributors and international associations to develop in-line with projections.

The Olive Industry - A Marketing Study is available for $15 by calling (02) 6272 4819

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