From specialty shops in Rome to supermarkets around the world, lovers of Italian olive oil are in for some sticker shock this year, with prices due to jump by as much as 20%.
The combination of bad weather and pests hit the harvest in Southern Europe, most of all in Italy, where production is halved from last fall. That's pushing up Italian wholesale prices by 64% as of mid-February compared with a year earlier, which translates to shelf price increases of 15-20% in Italy.
In other countries, the ultimate price increases will depend on several factors -- such as how much retailers take on the costs themselves and the change in currency values. The U.S., for example, is likely to see a more modest rise in price as a stronger dollar keeps a lid on the cost of imports.
Italy's harvest was especially hard hit by the combination of early rains that knocked buds off the trees and the threat of an olive fly that forced an early harvest, further cutting yields. Wholesale prices of olive oil from Spain, the world's largest producers, are up a more modest 10%, with yields similar to last year's.
Vincenzo Iacovissi, the owner of the Sapor d'Olio olive oil shop in Rome, says sales have dropped, though he's tried to ease the shock for customers by explaining why prices have gone up.
Italians collectively consume about 35% of the world's olive oil, leading Spain at 30%, and that affinity makes them pretty resilient as consumers.
Cedric Casanova, the owner of an Italian grocery in Paris, said he was hoping to get 30,000 litres of olive oil delivered, but received just 8,000 litres. He will have to rely on leftover stock from last year to help make up for the remaining difference -- and absorb some of the price increase himself.
With global stocks down just 14%, no one is predicting general olive oil shortages, even with a 75% increase in consumption of olive oil over the last 25 years as demand pushed into non-traditional markets. The market for olive oil in the period has grown by two-fold in the United States, seven-fold in Britain and 14 fold in Japan, according to Italy's Coldiretti farm lobby, even if continental Europe remains by far the largest market.
Italian olive oil is more vulnerable than that of other major producers to climate shifts and pests due to its varied topography, from hills in the north to larger groves in the south. This also lends great variety to Italian olive oil, where unique flavours are derived from a combination of the terrain, topography and the more than 400 olive varieties, according to Nicola Di Noia, an olive oil expert for the Coldiretti farm lobby.
He said the challenge was educating consumers about why they pay for quality.