Olive Oil

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Olive OilSusan Shultz a , Jami Xu b & Shari Buxbaum ca Gast Business Library , Michigan State University , East Lansing , MI , 48824 E-mail:b Gast Business Library , Michigan State University , East Lansing , MI , 48824 E-mail:c Gast Business Library , Michigan State University , East Lansing , MI , 48824 E-mail:Published online: 23 Sep 2008.

To cite this article: Susan Shultz , Jami Xu & Shari Buxbaum (2003) Olive Oil, Journal of Agricultural & Food Information, 5:2,11-20, DOI: 10.1300/J108v05n02_03

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Olive Oil

Susan ShultzJami Xu

Shari Buxbaum

Welcome to “Commodity of the Quarter,” a new feature brought toyou by columnists who are librarians at the Michigan State UniversityBusiness Library. We support the Broad School of Management andthe MSU campus and community in their need for business informa-tion. We intend to focus on a different commodity each issue and hopeto delight and astound you with a variety of sources and informationwe discover and present to you concerning the commodity of thequarter.

The definition of what constitutes a commodity differs accordingto the context in which it is used. In financial markets it could begrains, livestock, metals, but not manufactured goods. In broader

COMMODITY OF THE QUARTER

Susan Shultz (E-mail: [email protected]), Jamie Xu (E-mail: [email protected]), andShari Buxbaum (E-mail: [email protected]) are Business Librarians, Gast BusinessLibrary, Michigan State University, East Lansing, MI 48824.

Artwork is by Stephanie Ezzo.

Journal of Agricultural & Food Information, Vol. 5(2) 2003http://www.haworthpress.com/web/JAFI

2003 by The Haworth Press, Inc. All rights reserved.Digital Object Identifier: 10.1300/J108v05n02_03 11

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terms of international trade, a commodity could also include manu-factured items.

We have chosen olive oil to launch this new column. Olive oil maywell be one of the oldest commodities known to civilization. Oliveswere first grown in the eastern Mediterranean or south-central Asia.There is evidence of them being cultivated on the island of Crete in 3500before the common era. And there is the visual image of the dove return-ing to Noah’s Ark after the flood with an olive leaf in its beak. In ancientGreek civilization, olive oil kept everything greased, so to speak, in-cluding the athletes who rubbed down their muscular bodies at theOlympic games. Olive trees are renowned for longevity: the 1967 edi-tion of the Encyclopedia Britannica has a photograph of 1,000year-old trees on the island of Majorca.

COMMODITY ORGANIZATIONSAND INFORMATION SOURCES

We will inaugurate the Commodity Corner with a discussion of se-lected commodity organizations and sources of information. Compara-ble information specific to olive oil will then be presented.

Let’s begin with a brief explanation about how commodities aretraded. According to the Encyclopedia of Business, there are two meth-ods of trading commodities. They “may be traded directly on a spot orcash market, in which a physical good is delivered to the buyer, or indi-rectly on a futures market, in which a financial contract between buyerand seller specifies a future date, price, and other terms at which thegoods would hypothetically be traded.” Futures are traded on the floorof a commodity exchange. Each exchange trades futures on specificgroups of products or commodities, which can range from agriculturalproducts such as soybeans, corn, wheat, livestock and sugar to a widevariety of other products such as eurodollars, metals, stock indexes,natural gas, government securities, and even weather. This columnwill focus primarily on agricultural commodities. The following U.S.exchanges trade futures on agricultural products, in addition to othercommodities. The Web sites of all of these exchanges are excellentsources of information and data about the specific commodities theytrade. The Chicago Board of Trade site has an FAQ that very clearly ex-plains futures exchanges, markets and contracts. The link to this is fromtheir About page under CBOT Background.

12 JOURNAL OF AGRICULTURAL & FOOD INFORMATION

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Exchange Web site Products Founded

Chicago Board of Trade www.cbot.com Grains 1848

Chicago Mercantile Exchange www.cme.com Livestock and Dairy 1919

Kansas City Board of Trade www.kcbt.com Wheat 1876

Minneapolis Grain Exchange www.mgex.com Wheat 1947

New York Board of Trade–parent company of the Coffee,Sugar and Cocoa Exchange andthe New York Cotton Exchange

www.nybot.com Cocoa, coffee, sugarcotton, and milk

1998

18821870

At this time, the United States does not have an exchange that tradesin olive oil futures. However, the Spanish government approved thefirst olive oil futures market on November 7, 2003. This market is calledthe Mercado de Futuros del Aceite de Oliva (MFAO) or the Olive OilFutures Market (http://www.mfao.es).

Regulation and oversight of the U.S. commodities futures and op-tions markets is under the jurisdiction of the Commodity Futures Trad-ing Commission. The CFTC is an independent agency of the federalgovernment, established by Congress in 1974. Their extensive Web site(www.cftc.gov) contains authoritative information about exchanges,products, traders, and regulations.

OTHER SOURCES OF COMMODITY INFORMATION

Domestic and International

One of the best print sources of commodity information is The CRBCommodity Yearbook, published by the Commodity Research Bureau,Inc. This has been published annually since 1939, with the exception ofa brief interruption during World War II. The 2003 edition covers morethan 100 domestic and international commodities. Information abouteach commodity includes a brief narrative highlighting current trendsand contributing factors, such as weather or political events. This is fol-lowed by current and historical statistics including production, con-sumption and trade data. The Commodity Research Bureau does a finejob of sourcing this information from government agencies and privatecompanies, as well as trade and professional associations.

Another key provider of commodity information is The Food andAgriculture Organization of the United Nations (www.fao.org). Thefour UN publications that commodity researchers will find useful are:

Commodity of the Quarter 13

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• FAO Production Yearbook–provides statistics about global agri-cultural products and livestock.

• FAO Trade Yearbook–provides statistics about imports and ex-ports of global agricultural products.

• The Commodity Market Review–an annual online document thatdiscusses commodity market developments during the previousyear.

• The UN Commodity Trade Statistics Database (UN Comtrade) at(http://unstats.un.org/unsd/comtrade)–this resource contains tradestatistics for the approximately 130 countries or areas that reportthese statistics to the UN. Logging in as a guest provides limitedaccess of browsing 1,000 records, but not downloading.

Domestic

The federal government is a useful source of domestic commoditystatistics, specifically the Bureau of Labor Statistics and the UnitedStates Department of Agriculture. The BLS collects commodity data intheir Producer Price Index program. The PPI program “measures theaverage change over time in the selling prices received by domestic pro-ducers for their output” (BLS Site).

• Bureau of Labor Statistics (http://www.bls.gov/ppi/home.htm#data)–extracts historical monthly data for farm products ranging fromgrapefruits to tobacco.

• United States Department of Agriculture (http://www.usda.gov/nass/pubs/estindx.htm)–the National Agricultural Statistics Ser-vice of the USDA collects price and production data for U.S.crops.

OLIVE OIL ORGANIZATIONS AND INFORMATION SOURCES

Olive oil is a global food industry. The first International Olive OilConference was held in 1955, spearheaded by the International OliveGrowing Federation (FIO), the Food and Agriculture Organization ofthe United Nations (FAO), and the United Nations Economic and So-cial Council. This conference produced the first International Olive OilAgreement based on the principles of the 1948 Havana Charter to ex-pand world trade. The primary objective of the International Olive OilAgreement was to “encourage the international coordination of produc-


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tion, industrialization and marketing policies in the olive oil sector”(IOOC Site). The International Olive Oil Council is an intergovernmen-tal organization established to administer the International Olive OilAgreement, which is now on its fourth revision and is called the Interna-tional Agreement on Olive Oil and Table Olives.

If you are a novice to the olive oil industry, we recommend beginningyour research at the IOOC Web site. It contains a broad range of infor-mation delivered with a genuine commitment to the olive tree and itsproducts. The site contains historical, statistical, technical and eco-nomic information, which is nicely balanced with lighter fare such asnews, recipes, and links to other organizations. Links to the olive oil as-sociations of the top producing countries of the world are included be-low. To learn how olive oil is produced, the Spanish site provides adetailed explanation including a flow chart. If you’d like informationabout the olive tree habitat, click on the url for the Greek site. Pleasenote that the Italian site is only available in Italian.

International Olive Oil Councilhttp://www.internationaloliveoil.org/

Spanish Olive Oil Exporters Associationhttp://www.asoliva.com/ingles/home.htm

Italian Olive Oil Councilhttp://www.federalimentare.it/docassitol.html

Greek Association of Industries and Processors of Olive Oilhttp://www.oliveoil.gr

OTHER SOURCES OF OLIVE OIL INFORMATION

Domestic and International

The CRB Commodity Yearbook mentioned above is an excellentsource of statistics about olive oil. In addition to a discussion of currentdomestic and international trends in olive oil production, there are threetables organized by country: World Production of Pressed Olive Oil,World Imports and Exports of Pressed Olive Oil, and World Consump-tion and Ending Stocks of Pressed Olive Oil. All three tables providestatistics for the previous 8 years.


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The primary source of olive oil statistics in the CRB CommodityYearbook is Oil World (http://www.oil-world.com), a forecasting ser-vice for oilseeds, oils and oilmeals based in Germany. Their three mainpublications are:

• Oil World Weekly–this provides very current information aboutthe global supply and demand, and prices for oilseeds, oils andoilmeals.

• Oil World Monthly–this provides supply and demand statistics forthe major oilseeds, oils and oilmeals of the world.

• Oil World Annual–comprehensive coverage of the oilseeds, oilsand oilmeals industry.

The Encyclopedia of Business Information Sources lists the FAOProduction Yearbook and FAO Trade Yearbook as important sources ofolive oil information.

Domestic

The San Luis Obispo Tribune reports that less than 1% of world oliveoil is produced by the United States; however, California has 98% ofthat market. Domestic statistics of production, consumption and im-ports can be found in both the CRB Commodity Yearbook and from theForeign Agricultural Service of the USDA (http://www.fas.usda.gov).

There are several worthwhile sources of information about the Cali-fornia market. The mission of the California Olive Oil Council, as statedon their Web site, is to “make California a source of sustainable, com-mercially viable world class olive oil.” They accomplish this throughgrower/producer and consumer education and administering a certifica-tion program for extra-virgin olive oil based on the International OliveOil Council standards. The Web site of this nonprofit organization (http://www.cooc.com) reflects this mission, with information for both con-sumers and growers/producers. An example of their commitment to thisdual audience is their resource page that includes information aboutboth suppliers of olive trees, as well as suppliers of bulk olive oil.

Need more statistics? The Olive Oil Source (http://www.oliveoilsource.com) has statistics, industry information, and much more. The Olive OilSource is a private company and the mission of their site is to offer in-formation about olive oil and health. Once you spend some time on theirWeb site, you will realize that this mission statement seems somewhatunderstated. The Web site they have created is both broad and deep. To


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give our readers a flavor of this, their list of recommended books pro-files not only cookbooks, but also olive oil related books about travel,lore, history, fiction, and diet, as well as books written with the growerin mind.

And finally, the California Agricultural Statistics Service of theUSDA collects and disseminates crop statistics. Statistics for the Cali-fornia olive crop can be found at (http://www.nass.usda.gov/ca/oth/indexolv.htm).

STANDARDS AND GRADES OF OLIVE OIL

Olive oils are graded according to production method:

• First pressing oil is called virgin oil. Extra-virgin is the designationgiven to the first pressing which is done by crushing the cold oliveswith a stone mill or hydraulic press. The oil must have an aciditylevel of less than 1%.

• Second pressing is done with hot water. The oil may be blended,but has no more than 1.5% acidity.

• Oil extraction from the olive pomace (the olive residue left afterthe first and second pressings) is done with the help of solvents.The resultant oils are the commercial grade used in industry.

Almost every olive oil producing country has a range of oils with char-acteristics that vary by region and ripeness of the fruit when harvested.

The Food and Agriculture Organization and the World Health Orga-nization created the Codex Alimentarius to set standards to protect thehealth of consumers and coordinate fair trade practices for foods (http://www.codexalimentarius.net/index_en.stm). The standard for olive oilgives details of composition and quality for olive oil, virgin olive oil, re-fined olive oil, and refined olive-pomace oil.

REGULATIONS FOR IMPORTERS

The classification of olive oil in the Harmonized Tariff Schedule ofthe United States (HTSUS) is in Chapter 15.0900-1000. According tothe Importer’s Manual USA, “olive oil is the edible oil expressed fromthe sound, mature fruit of the olive tree. Refined or extracted oil is notentitled to the unqualified name ‘olive oil.’”


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Let’s move beyond the discussion of olive oil as a commodity andtouch on some other interesting aspects of this ancient yet cutting-edgegolden liquid. Much of the information discussed below was found atthe Olive Oil Source (oliveoilsource.com).

OLIVE OIL IN THE KITCHEN

Olive oil is a monounsaturated fat, easily digested and containing vi-tamin E. It has no cholesterol, which is found in butter, lard, and otherfats. Vitamin E may help protect us against cancer and heart disease.The principal fat in the diet of countries where it has long been culti-vated, olive oil is often used in place of cream and butter and as a cook-ing fat and salad oil.

In cooking, olive oil is very versatile. Olive oils with a pronouncedflavor can be used for frying fish or other strong-flavored ingredients. Alight, flavorless oil could be used in baking cakes. Olive oil has a highsmoke point; therefore, it can be reheated without degrading its quality.When preparing food, using a good extra-virgin olive oil gives youhealth benefits and wonderful Mediterranean flavor.

OLIVE OIL IN COSMETICS

Olive oil is used in manufacturing lip balm, shampoo, bath oils, handlotions, soap, soak for nails, massage oil, and dandruff treatment oil.Surfactants and emulsifiers made from olive oil are used in a broadrange of new-generation cosmetics found in natural and organic mar-kets. Olive oil’s unique fatty acid profile is found to give the products asilky feel, skin-friendly properties and a very good moisturizing effect.

OLIVE OIL HEALTH BENEFITS

Researchers have found relationships between diet emphasizing ol-ive oil and reduced risk of heart disease. It was long ago noticed thatpeople who live in the Mediterranean had longer life expectancies andlower rates of heart disease and certain cancers. They followed what isknow as a Mediterranean Diet, which is mainly made up of vegetables,fruits, fish, olive oil, and very lean meat. It has been recently confirmed


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that the closer people follow the Mediterranean Diet, the lower their riskto develop heart disease.

One of the most important diabetes nutrition guidelines is to hold sat-urated fat to less than 10% of calories. Olive oil is very useful in replac-ing the “bad” fat with a “good” monounsaturated fat.

According to a study reported in the journal Cancer Causes and Con-trol, a diet high in olive oil may lower a woman’s risk of developingovarian cancer. The study found that women whose diet included alarge amount of olive oil reduced their risk of ovarian cancer by 30%.Some European studies also found a relationship between lower breastcancer risk and women’s intake of monounsaturated fat, mainly in theform of olive oil.

In conclusion, we have enjoyed this journey through the world of ol-ive oil. We found a sense of commitment and collaboration permeatedthe Web sites we visited and now have a desire to learn more about thisimportant industry.

REFERENCES

Amari, Sergio, Anthony Ansaldi, and Cristina Schubert. “New Fruit From an AncientTree.” Global Cosmetic Industry March 2002: Online. ABI/Inform. December 8,2003.

American Cancer Society. “Olive Oil May Lower Ovarian Cancer Risk.” RetrievedDecember 8, 2003 from http://www.cancer.org/docroot/NWS/content/NWS_1_1x_Olive_Oil_May_Lower_Ovarian_Cancer_Risk.asp.

American Diabetes Association. “The Diabetes Food Pyramid: Fat.” Retrieved De-cember 8, 2003 from http://www.diabetes.org/main/health/nutrition/foodpyramid/fat.jsp.

Anonymous. “TRI-K Industries, Inc.” Global Cosmetic Industry February 2001: On-line. ABI/Inform. December 8, 2003.

“Commodities.” Encyclopedia of Business. Detroit: Gale Group, 2000.“Commodity Exchanges.” Encyclopedia of Business. Detroit: Gale Group, 2000.Commodity Research Bureau. The CRB Commodity Yearbook 2003. Hoboken, NJ:

John Wiley & Sons, Inc., 2003.de Guzman, Doris. “Olive Oil Gains Ground in US Salad and Cooking Oils.” Chemical

Market Reporter August 18, 2003: Online. ABI/Inform. December 8, 2003.Downes, John, and Jordan Elliot Goodman, eds. Dictionary of Finance and Investment

Terms. Hauppauge, NY: Barron’s, 2003.Harmonized Tariff Schedule of the United States Annotated at http://www.usitc.gov/

taffairs.htm.Harvard School of Public Health. “Fats & Cholesterol–The Good, The Bad, and The

Healthy Diet.” Retrieved December 2, 2003 from http://www.hsph.harvard.edu/nutritionsource/fats.html.


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Hinkelman, Edward G. et al., eds. Importers Manual USA. San Rafael, CA: WorldTrade Press, 2002.

“Olive.” Encyclopedia Britannica. Chicago: William Benton, 1967.Richwine, Lisa. “Mediterranean Diet Is Good for Your Heart-Study.” Retrieved De-

cember 2, 2003 from http://www.nlm.nih.gov/medlineplus/news/fullstory_14609.html.

Van Beurden, Larissa. “Olives Become Popular Crop in Paso Robles, Calif., Area.”The San Luis Obispo Tribune November 20, 2003: Online. LexisNexis Academic.December 1, 2003.

Woy, James, ed. Encyclopedia of Business Information Sources. Detroit: Gale Group,2003.


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Olive Oil