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Olive oil is fast becoming the oil of choice for Aussies, most is imported.Ole has been pushed up of late on good volume, they have indicated that production from the olive grove will start this year.

I feel that this is a growth industry esp over the longer term.

http://www.oleaaustralis.com.au/olea/oleahomepage.asp

JR
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I would urge caution if taking a long term view.
I seem to recall reading over the last couple of years that when all the growers in the pipeline finally come online that the market will be flooded and Australia will be export positive for olive oil. This will mean depressed prices and profits.
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I would urge caution if taking a long term view

True, a new industry such as this is often doubted, that will cause price fluctuations.

I seem to recall reading over the last couple of years that when all the growers in the pipeline finally come online that the market will be flooded and Australia will be export positive for olive oil. This will mean depressed prices and profits.

I'm sure the same was said about the wine industry in the early days.
More production not only made wine much cheaper in Aus but also created a massive home as well as export market that was very small(Aus market)
& non existant (export market) before.

I see some rather tempting parallels between the two.
The olive oil market has been growing dispite the very expensive price in comparision to other oils.Higher Aus production based on sales of olive oil at current prices in my opinion could well be misleading, as I feel that higher production(more competition) will only serve to supply a bigger slice of the market to olive oil which long term is very positive & makes those figures wrong.

Its why shopping centres work , why car yards are often bunched together, competition isn't bad, it will produce winners & losers & in this case it will make a help mould a virgin industry an industry that I feel has a good growth potential long term.

Over production I see as a shorter term concern, as with most producers thats something that happens more on a year to year basis.

JR


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I would urge caution if taking a long term view.
I seem to recall reading over the last couple of years that when all the growers in the pipeline finally come online that the market will be flooded and Australia will be export positive for olive oil. This will mean depressed prices and profits.


I'd like to add my two cents worth as well !! Parts of NZ have an ideal climate for producing excellent olive oil and these regions are planting trees like it's going out of fashion. There's sure to be a glut at some stage.
An Australasian Olive Oil lake no less !!
Regards
Harmy
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Just thought to add my 2 cents worth to the olive oil debate..

Someone very close to me (who really new his stuff about agriculture)
was given the job of looking into the olive oil industry as part
of a business venture. Bearing in mind that this was done three
or four years ago,he investigated the projects throughly over
a few months, visited the farms, talked to lots of experts ect
after doing the math it was found that it is still cheaper to
import the stuff!
(A stockbroker remarked that in his opinion the olive oil thing
may be the next ostrich farm situation,)
The companies running these farms also charge very high management
fees as well,
Unless the situation is very different now, I think I would
be cautious.

Cheers.FC.
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There's sure to be a glut at some stage.
An Australasian Olive Oil lake no less !!


If that happens I'd hate to be holding stock that derives it's main income from any of the existing oil products. A glut will, I feel, hand a bigger slice of the market to olive oil, that market share once won will be hard to take away meaning longer term upside for the industry.
I feel because olive oil is a healther & over all better product any excess production will drive the price down therefore making olive much more competitive & attractive to consumers.

JR
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Bearing in mind that this was done three
or four years ago,he investigated the projects throughly over
a few months, visited the farms, talked to lots of experts ect
after doing the math it was found that it is still cheaper to
import the stuff!


MMM what was the Oz dollar at the time? (around .65c to .75c I think)
,that alone suggest the report is out dated
Not discounting your post but 4 years can make a big dif.

(A stockbroker remarked that in his opinion the olive oil thing
may be the next ostrich farm situation,)


I'd think that the olive oil market is vastly differant to the Ostrich market but I may be wrong. I just can't see many parallels between the two as I mentioned in my reply to Barcoo I see more parrallels with the wine market.

The companies running these farms also charge very high management
fees as well,

Yep, thats one thing the FA investor needs to look into.

Unless the situation is very different now, I think I would
be cautious.

Well the differance is it's 4 years later, to me thats a look at the viability of the industry at that time.

JR



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