Olive Oil Lovers Warned About Price Jumps

ROME (AP) -- 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 percent.

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 percent as of mid-February compared with a year earlier, which translates to shelf price increases of 15 to 20 percent 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 percent, with yields similar to last year's.

Italians collectively consume about 20 percent of the world's olive oil, leading Spain at 16 percent, and that affinity makes them pretty resilient as consumers. The U.S. is the third-biggest market, consuming 10 percent of the yearly total.

With global stocks down just 14 percent, no one is predicting general olive oil shortages, even with a 75 percent 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.