Olive oil demand and price driven up by Russia's war in Ukraine

The outbreak of the war in Ukraine, which led to an immediate global shortage of sunflower oil, inevitably triggered increased demand for olive oil as the supply of vegetable and seed oils dried up and prices approached levels close to that of olive oil, said Australian Olive Oil Association (AOOA) president, David Valmorbida.

"We haven't seen a situation like this before", Mr Valmorbida said.

"The Mediterranean olive harvest concluded in early 2022 and was modest, sustaining higher-than-average farmgate prices around $4.65/L in Spain and $5.70/L in Italy, the largest producers of olive oil in the world.

"However, the demand caused by the war in Ukraine has been further compounded by record heat waves across Europe during June and July, causing the price of olive oil to increase to near record highs; as much as $5.50/L in Spain and $6.50/L in Italy, and still climbing.

"The outlook for the 2022/23 Mediterranean crop, which begins in October, looks increasingly pessimistic, triggering a possible multi-year global shortage of olive oil as reserve stocks run out."

Meanwhile, the AOOA has reported the 2022 olive harvest as a mixed result for growers across Australia.

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Because of the biennial cycle of olives, 2022 was, as expected, a lower crop year, the association explained in a statement.

The association estimates the 2022 harvest will yield 14 to 15 million litres of olive oil, down from last year's bumper crop of 20 to 22 million litres.

The 2022 Australian crop is likely valued in the range of $90-$110 million in wholesale/bulk farmgate value.

Mr Valmorbida said the harvest varied across Australia, depending on weather conditions.

"Volumes were down considerably on the east coast and in some areas the profile of the oil produced has been milder in flavour than normal, partly as a result of the impact of weather conditions on the olives; more rain and less sunshine," he said.

"Heavy rains and wet groves have not only damaged fruit, but hindered the ability for farmers to use heavy machinery to harvest the fruit."

The Olive Centre chief executive officer Amanda Bailey said some states had certainly done it tougher than others.

"There has been virtually no production in the Hunter Valley where there were environmental issues at the time of flowering, so the trees didn't produce fruit, while other parts of NSW have had better yields," she said.

"Parts of Western Australia produced an exceptional crop and Tasmania had a strong season with larger producers recording a bumper crop. Oil yield was excellent as well."

Australia's largest producer, Cobram Estate, is the main driver of volumes in Victoria and estimated a crop of approximately 9.5 million litres, down from 16m litres in 2021.

In South Australia, 2022 has been a tight season, with volumes down from previous years and some farmers reportedly unable to harvest as they would normally.

"However, overall, the olive harvest wasn't too bad, considering this was an 'off' year in the cycle. For growers who produced a strong crop, the oil quality was excellent and pungent in character," Ms Bailey said.

Demand for Australian olive oil remains strong and that is reflected in the price, with growers earning between $5.50/Lto $6.50/L for larger commercial volumes of extra virgin olive oil at the farm gate.

This year's National Olive Industry Conference and Trade Exhibition be held at the Paranaple Convention Centre in Devonport, Tasmania on Saturday and Sunday, October 15 and 16, with an optional field tour Friday, October 14.

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