Shoppers risk paying more for their olive oil this year as a drought in Spain and a blight in Italy wither trees in the two top producers, driving up prices.
Months of dry weather have struck Andalusia in the south of Spain, the world’s biggest producer of the “yellow gold.”
In the second-biggest grower Italy, the bacteria xylella fastidiosa has shriveled olive branches in the southern Puglia region.
“Prices will rise by 30 to 40 percent because there will be fewer olives and therefore less oil produced,” Puglia olive farmer Raffaele Piano said.
“But quality will not be affected,” he said.
“There is no cure. The only solution is to burn the infected trees to stop the bacteria spreading quickly,” he said.
Producers in parched Spain say they expect their prices to rise too over the coming months as the October harvest approaches, but hesitate to forecast by how much.
In an early warning sign, the market price of virgin olive oil has crept up over recent weeks from 2.40 euros (US$3.18) to 2.70 euros a kilogram, the Spanish olive oil federation Infaoliva said.
It warns the rise will continue.
Fewer olives rolling into farmers’ nets this autumn makes a recipe for higher prices when combined with ever-mounting demand worldwide.
Olive oil has long been a staple of the Mediterranean diet, and over recent decades it has become popular in cooking in many parts of the world because of its perceived benefits for health.
SURGE IN DEMAND
Demand has surged by 60 percent in the past 20 years, driven by China, the US, Australia and Canada, according to the International Olive Oil Council.
Spain produced 1.77 million tonnes of olives in the last harvest from October last year to June, according to the agriculture ministry.
“Last season was exceptional. Production was very big,” 40 percent higher than the average of the previous four years, said Cristobal Gallego, an olive oil official for a cooperative of food producers in Andalusia.
“Everything indicates that the next harvest will be very close to the level of the one two years ago” which was just 618,000 tonnes, he said.
Enrique Delgado Hidalgo, secretary general of Infaoliva, forecast that the harvest could be “between 800,000 and a million tonnes.”
“The harvest will be limited but sufficient to supply the domestic and international markets,” he said.
The Germany-based analysis institute Oil World gave a more optimistic forecast, estimating that Spain would produce between 900,000 and 1.1 million tonnes this coming harvest.
A price rise, meanwhile, would be “good news for producers”, who suffered losses when strong production last year drove prices down, director of Oil World Thomas Mielke said.
In the life cycle of olive groves, “there is often a decline in production per tree after a year of strong production,” which is set to be aggravated this year in Spain by the drought, he said.
Watering the olive trees cannot make up for the lack of rain in sweltering Andalusia, Gallego said.
In the heart of the poor farming region of Andalusia, where olive groves blanket the hillsides as far as the eye can see, the province of Jaen alone accounts for 45 percent of Spain’s production.
It is among the areas hit by the drought.
Ahead of the harvest, farmers will be watching the skies for signs of rain that could change their fortunes.
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