The NSW Department of Primary Industries’ (DPI) Wagga Wagga Edible Oils Laboratory - a cornerstone of Australia’s olive and oilseed testing infrastructure - is expected to cease operations by Christmas 2025, with sample submissions accepted only until mid-November. The closure represents a significant loss for growers, processors, and exporters who have relied on the lab’s internationally accredited testing services for more than two decades.

End of an Era for Australian Olive Testing

Located within the Wagga Wagga Agricultural Institute, the DPI’s edible oils laboratory has been one of Australia’s few facilities accredited to NATA, AOCS, and International Olive Council (IOC) standards. It has played a critical role in verifying olive oil quality, authenticity, and export compliance, as well as providing trusted testing for canola and other oilseeds. 

 The lab’s closure follows the NSW Government’s announcement of widespread job cuts across the Department of Primary Industries - around 165 positions statewide - raising alarm among regional industries dependent on these essential technical services.

Timeline and Transition

According to industry updates, the Wagga team will continue accepting samples until approximately 14 November 2025, before winding down operations ahead of Christmas. After that point, testing services will no longer be available through the Oil Testing DPI Laboratory.       

 While the department has yet to make a detailed public statement about the transition plan, producers are being advised to prepare for changes now, especially those requiring export certification or routine oil-quality analyses.

Industry Impact

The loss of this facility is being described as a major setback for the Australian olive industry, particularly for small to mid-sized growers in New South Wales and surrounding regions. The Wagga lab’s proximity and affordability have long made it a practical option for quality assurance, benchmarking, and product validation - key factors in maintaining consumer trust and market competitiveness.

Its closure could mean:

• Increased costs and turnaround times, as samples must be sent interstate.
• Reduced regional research capacity, given the lab’s collaboration in DPI and university-led olive research programs.
  
• Greater dependence on private sector testing is raising concerns about independency, access, pricing, and service continuity.
  

Testing Alternatives

With the Wagga Wagga laboratory closing, industry attention is turning toward Modern Olives Laboratory Services in Victoria, which offers a full suite of IOC-listed testing options, though it is not currently IOC-accredited for olive oil and related products in 2025. Modern Olives Laboratory holds AOCS recognition for both chemical and sensory analysis for 2025, as well as a TGA licence covering chemical and physical testing of olive oil derivatives and microbiological testing of olive derivatives only.

Modern Olives is a long-established  recognised testing facility providing analytical services to growers, processors, and exporters across Australia and overseas. More information about their services can be found at:

Link: https://modernolives.com.au/services/testing-oil/

A Call for Coordination

Industry leaders are urging state and federal governments to engage with the olive and edible oil sectors to ensure a smooth transition of testing capabilities and protect the integrity of olive oil standards. Without a coordinated plan, the risk grows that smaller producers could lose access to affordable, timely, and accredited testing - jeopardising both domestic labeling compliance and export eligibility.

Looking Ahead

As Australia continues to strengthen its reputation for high-quality, traceable olive oil, maintaining a strong laboratory infrastructure is essential. The Wagga Wagga lab’s closure marks the end of a chapter in regional agricultural science, but it also highlights the need for ongoing investment in independent, nationally recognised testing to support the industry’s future growth.

For further information:

• NSW DPI Edible Oils Laboratory - Test List & Pricing
• Modern Olives Laboratory Services - Testing Olive Oil
• ABC News- NSW DPI job cuts spark anger across regional communities

“Earlier in the season, the industry was anticipating an excellent harvest,” Mr Valmorbida said. “However, persistent cold weather and rainfall during May and June, particularly across south-east Australia, have taken their toll.”

Although the Australian olive harvest is not officially recorded each year, the AOOA estimates that the 2023 season will produce between 18 and 19 million litres of olive oil from roughly 110,000 to 120,000 tonnes of olives.

This compares with last year’s output of 14–15 million litres and the record-breaking 2021 crop, which yielded 20–22 million litres of oil.

Mr Valmorbida explained that these fluctuations reflect the biennial cycle of olive production. “This is what we call an ‘on’ year for olives. While we were expecting an excellent yield earlier in the year, harvest results always depend heavily on weather conditions, and this season has been quite mixed for many growers.”

“The oil yield per tonne is noticeably lower than average due to the cooler growing period,” he added, “but the quality of the oil remains excellent because the fruit had more time to ripen gradually.”

Around the world, olive oil prices have reached record highs in Spain, Italy, and Greece, driven by a severe global shortage of olive oil. Hot temperatures, minimal rainfall during key stages of the growing season, and extended drought conditions across southern Spain have drastically reduced European output. In addition, the ongoing conflict in Ukraine has disrupted the production of vegetable and seed oils, increasing global demand for olive oil as an alternative.

In Australia, growers are currently achieving $6–$7 per litre for larger commercial volumes of olive oil, with even higher prices for export batches, premium small-lot oils, and organic extra virgin olive oil.

“With this global shortage, some of the larger Australian producers are in a strong position to export olive oil to Europe and receive competitive returns,” Mr Valmorbida said.

“While that’s encouraging news for the Australian olive oil industry, globally the sector is under pressure,” he continued. “There’s currently a 35–40 percent shortfall in available products, combined with escalating packaging costs, especially for glass and tin materials.”

“These factors, along with rising labour and energy expenses, are leading to higher retail prices for consumers,” he noted.

Mr Valmorbida concluded with a reminder to consumers: “It’s important to remember there’s no product quite like olive oil—its distinctive flavour, health benefits, and culinary versatility make it irreplaceable.”

#oliveharvest2024 #harvest2024

About the Australian Olive Oil Association

The Australian Olive Oil Association (AOOA) is a not-for-profit, independent organisation dedicated to promoting the quality, integrity, and fair trade of olive oil in Australia. Membership is open to olive oil producers, distributors, industry stakeholders, and related organisations.

Since 1993, AOOA has been a signatory to the International Olive Council (IOC) global quality control program. Each year, the Association coordinates independent laboratory testing of leading olive oil brands to ensure compliance with IOC standards.

In addition, the AOOA Certified Quality Seal Program upholds even stricter quality criteria, allowing AOOA-member products to distinguish themselves in both domestic and international markets.

For more information: 

Jan Jacklin, General Manager, Australian Olive Oil Association gm@aooa.com.au www.aooa.com.au

Photo credit:  Julia, olive grove – Kyneton Olives” by avlxyz is licensed under CC BY-SA 2.0. To view a copy of this license, visit: https://creativecommons.org/licenses/by-sa/2.0/?ref=openverse

Introduction

The global olive oil industry in 2023 has entered uncharted territory, experiencing an extraordinary surge in olive oil prices driven by a combination of climatic and economic forces. At the centre of this crisis lies Spain’s devastating drought, which has crippled the world’s largest olive oil producer. This severe shortage has led to a dramatic contraction in olive oil supply, triggering price escalation and a corresponding decline in consumer demand. The ripple effects are being felt worldwide, reshaping the balance between producers and consumers alike. Meanwhile, Australian olive oil producers find themselves in a rare position of advantage, benefitting from unprecedented market highs. This article explores the causes, consequences, historical trends, and economic signals surrounding this remarkable global olive oil price spike.

The Spanish Drought and Its Impact on Supply

The ongoing drought across Spain stands as the principal factor behind the current olive oil price surge. As one of the largest olive oil-producing nations globally, Spain’s drastically reduced harvest - caused by months of extreme heat and minimal rainfall - has sharply curtailed olive oil availability in both European and international markets. This has intensified supply shortages, compelling consumers to pay more for what has long been a staple Mediterranean product. The interplay of limited supply and escalating demand has magnified price volatility, reinforcing the classic supply-and-demand imbalance now driving global markets.

Incredible to see the olive groves of Jaen, Spain. This one province produces around a fifth of the *entire* global supply of olive oil

But a combination of drought & extreme heat has left many trees badly weakened... This years harvest looks set to be the worst in living memory pic.twitter.com/QYs41eXCwC

— Secunder Kermani (@SecKermani) August 31, 2023

Decline in Consumer Demand

As prices have risen steeply, the shortage of olive oil has led to a noticeable decline in consumption, particularly in Spain, where demand has reportedly dropped by around 35%. Consumers are now scaling back their purchases, finding olive oil increasingly unaffordable compared to other cooking oils. The once-steady household consumption patterns are shifting as people seek alternatives or modify their cooking habits. This contraction in domestic demand not only highlights the growing accessibility gap for consumers but also underscores the broader economic strain caused by high inflation and food price increases.

Australian Olive Oil Producers Reap the Rewards

Amid the turmoil, Australian olive oil producers are experiencing a windfall. Thanks to limited global supply, Australian growers are commanding record prices exceeding AUD $8 per litre, marking the highest levels ever recorded in the nation’s olive oil industry. This lucrative period presents a rare opportunity for Australian exporters, with demand from Europe - including Spain itself - now turning toward Australian supplies. For producers Down Under, this unique reversal of roles underscores how regional climate resilience and diversified production can translate into significant financial gains when global shortages arise.

Historical Context: How the Market Reached 2023

The olive oil market’s volatility is not a new phenomenon. Previous spikes occurred in 1996, 2006, and 2015, each triggered by weather-related supply constraints. Yet, the 2023 price explosion stands out as the most dramatic in recorded history -over 40% higher than any previous price peak, and roughly double the magnitude of earlier surges. This extreme escalation reflects not just climatic hardship but a clear pricing bubble forming within the market, echoing the cyclical nature of commodity pricing.

Cyclical Trends and Economic Correlations

The olive oil sector has long followed cyclical pricing patterns, typically alternating between low and high price phases roughly every decade. The current surge aligns almost perfectly with the predicted start of another 10-year cycle, occurring just three years into its anticipated timeline. Furthermore, a notable correlation has been identified between the Australian Food Inflation Index and the Global Olive Oil Price Index as reported by the International Monetary Fund (IMF). This connection illustrates the deep interdependence between food commodity pricing and global economic conditions.

While the IMF’s benchmark prices are denominated in USD, for the purposes of this analysis they have been converted to AUD to track the trend relative to Australian markets. These benchmark indicators -based on the world’s largest olive oil exporters -serve as a reliable gauge of overall market direction, confirming how global shortages and inflationary pressures move in tandem.

Technical Indicators: Signals of an Overbought Market

From a technical analysis perspective, the Relative Strength Indicator (RSI) is often used to measure price momentum and potential overextension in markets. On recent olive oil price charts, the RSI (represented in purple) indicates that prices have once again entered overbought territory - a level seen during previous speculative phases. Historically, such readings have preceded market corrections or reversals, suggesting that the current surge may not be sustainable in the long term.

Analysts caution that as the European olive harvest begins in September and October 2023, an influx of new oil supplies could help ease prices, though the timing and extent of this correction remain uncertain. Until then, speculative trading and limited inventory continue to support inflated market values.

Conclusion

The record-breaking olive oil prices of 2023, primarily triggered by Spain’s drought-induced production collapse, mark a turning point for the global olive oil economy. With consumer demand declining under the pressure of soaring prices and Australian producers thriving amid the scarcity, the industry is experiencing a dramatic rebalancing. Historical precedents, cyclical trends, and market indicators all point toward a complex, transitional period defined by volatility and uncertainty.

As the world’s producers, traders, and consumers adapt to these new market dynamics, one truth remains clear: olive oil - celebrated for its taste, health benefits, and cultural significance - continues to be at the mercy of both climate change and economic cycles. Stakeholders across the value chain must remain alert, flexible, and forward-thinking as the olive oil market navigates this extraordinary phase of transformation.

Other Sources

• Olive Oil Prices at Origin   
• POOLred, Spain