Blame Italian olive bugs for dearth of virgin oil
PARIS — Every autumn, Fabio Landini lines up with other olive growers at a mill in Tuscany, Italy, where traditional stone presses crush the oil from his crop. This season, he didn’t get a single drop.
A fruit fly infestation has ravaged orchards across Italy, the world’s top producer of olive oil after Spain. In a country where ancient Romans coated themselves in olive oil and modern residents use it to dip bread and make pasta sauce, output may drop 35 per cent this year, according to the Romebased Institute of Services for Agriculture and Food Markets, or Ismea.
“We didn’t harvest,” said Landini, a retired investment banker, who gets about 150 litres of oil from his grove of 80 trees in a typical year. “The few olives we had were affected by the olive fly, full of grubs.”
Crop damage in Italy and a weak harvest from Spain mean global production in the season through September 2015 will be the smallest in 15 years, the International Olive Council said Tuesday. At a time when global food costs are dropping, olive- oil prices are surging for Italian consumers mired in a three- year recession, as well as for major importers including the U. S., where consumption has tripled in the past two decades.
“People will pay more,” said Michael Bradley, president of Oakland, Calif.based Veronica Foods, which imports more than 3.8 million litres a year.
Intermediate- quality virgin olive oil from Spain, an industry benchmark, may reach $ 4.50 a kilogram in the next two to three months, Bradley said, an increase of about 65 per cent from this week.
The effect is already being felt by Laura Bevilacqua, who runs a farm and restaurant in Palombara Sabina, Italy. While she usually produces enough of her own oil for use in her kitchen and to sell a few bottles, she was forced to buy it this year. The restaurant hasn’t raised prices because diners are less willing to spend in a shrinking economy, she said.
“This olive- oil crisis is really knocking us out,” Bevilacqua said.
Olives trees, which can produce fruit for hundreds of years, are harvested in Italy from September through January. The average household in the country uses about 34 litres of the oil a year, according to data compiled by Bloomberg from Rabobank and the Organization for Economic Co- operation and Development.
Prices for Italian top- grade extra virgin oil touched a record in November and are up 46 per cent at the mill in the past two months. Spanish inter-mediatequality virgin oil has risen 61 per cent from a low in May.
“Some consumers will ration olive oil and switch to others, in particular, sunflower oil,” according to Vito Martielli, an oilseed analyst at Rabobank in Utrecht, Netherlands.
Global harvests of soybeans, oil palm, rapeseed and sunflower seeds have touched highs in recent seasons, boosting output of vegetable oils to records this year, U. S. Department of Agriculture data show.
Spain’s olive oil output is forecast to drop to 750,000 tonnes from last year’s record of 1.78 million tonnes, after the crop was hurt by hot weather and disease.
While production is booming in Greece and Tunisia, it won’t be enough to prevent a decline in the Mediterranean region, which accounts for 97 per cent of world production.