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Olive Oil Price to rocket
Olive oil is expected to become more expensive for Brits. The liquid gold of the Mediterranean diet is going to shoot up by 20 percent.
2017 will be a very bad year for olive oil. This will be the second of two consecutive years of poor harvest for Spain and Italy, the two main olive oil producers.
In Spain, an unusually hot and dry Summer just led to the worst harvest in nearly 20 years. Italy’s harvest was especially hard hit by the combination of early rains that caused the buds to fall off the trees and the threat of an olive fly that forced an early harvest. The outbreak of the Xylella fastidiosa bacteria among olive groves, caused more than a million trees to become infected. Production is halved from last Autumn. As a consequence, Italian wholesale prices went up by 64%, compared to a year earlier, and shelf prices have increased by 15 to 20% in Italy. Wholesale prices of olive oil from Spain, are up by 10%, with yields similar to last year’s. Greece, is not doing very well either, as last Spring's heat waves are threatening to cut output by about one-fourth.
Floods in Andalusia, Spain's main olive growing region, ruined its harvest. At the same time demand is increasing from other emerging markets, such as China. Spanish producers have had to drain stockpiles to meet export orders, including those to the U.S.
British consumers may soon be forced to pay up to a third more to buy extra virgin olive oil, especially if the pound and the euro reach parity once more. The price increase will be more modest in the U.S. because of the good exchange value of the dollar.
Olive oil is a key component of the Mediterranean diet. Italians collectively consume about 20% of the world’s olive oil. Prices for extra virgin olive oil in Italy have soared almost one-third since October to €5.75. Spain consumes 16 %. The U.S. imports more than 300,000 tons of olive oil a year. It is the third-biggest market, consuming 10% of the yearly total.
In Italy, there are hundreds of different varieties of olives that are more difficult to defend compared with Spain or northern Africa, where there are big groves that are easier to manage.
Italy’s varied topography, from hills in the north to larger groves in the south makes Italian olive oil more vulnerable, than that of other major producers, to climate shifts and pests. For the same reason, Italian olive oil has great variety because unique flavours are derived from a combination of the terrain, topography and more than 400 olive varieties.