Olive oil price set to rocket

Updated: 

olive harvestingMuhammed Muheisen/AP/Press Association Images

There could be a crisis in middle class kitchens across the UK, because the price of olive oil is set to go through the roof. Wholesale prices have already risen almost a third in the last two months, and the experts say they have now reached a level where the increase will have to be passed onto shoppers.

So what's going on?

Prices

According to retail trade magazine, The Grocer, the cost of olive oil has been lower recently than for many years. We had been benefiting from bumper crops in Europe, which means many cooks have turned to olive oil as it grew more affordable.

Filippo Berio reported its biggest ever sales figure in the UK this July - when it sold per 1.3 million litres of olive oil in the UK.

Drought

However, all that could change, because of a drought in Spain, which has severely damaged the olive crop. The yield is down 40% on last year's harvest.

Usually Spain produces 1.2 million tonnes of olive oil. Last year it produced 1.6 million - but this year it could be less than a million. Harvests from Greece and Italy are also expected to have fallen.

Pain

Leftover stock from the bumper harvest have so far kept prices down, but these stocks are largely exhausted (and those who have spare stocks are hanging onto them in the hope that prices keep rising). It is rapidly getting to the stage where wholesale price rises are going to be passed onto consumers.

This is going to hit consumers hard. Of course it doesn't help that prices of a number of kitchen staples are simultaneously rising because of crop failures elsewhere in the world. The US, Russia and Ukraine are all reporting poor harvests of everything from corn to wheat and soybeans, and warning that products from meat to bread will be rising in price later this year.

Act

The good news is that if prices rise beyond your pocket, there are alternatives. If olive oil moves beyond our reach, there is always a range of neutral flavoured oils including rapeseed oil - which is booming in popularity - and sunflower oil. If you want flavours, on the other hand, you can experiment with walnut oil, avocado oil or sesame oil. Of course, you could simply trade down to a light olive oil instead of extra virgin olive oil.

So what do you think? Will you be priced out of the olive oil market, or will you pay extra for your pasta sauce this winter?

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