(Olive) Oil Prices Rise

If you are a lover of olive oil, now is the time to stock up.

“The tip from the Italian cognoscenti is to buy as much as you can consume,” says Piero Selvaggio, who certainly fits that description as owner of Valentino, Primi and Posto restaurants. Selvaggio says the price he’s paying for oil has recently increased from 20% to 30%. “And it looks like it will only go higher and higher.”

What’s the cause? Depending on whom you ask, it’s droughts, floods or plain old politics.

Richard Sullivan, president of the North American Olive Oil Assn., a trade organization of olive oil importers, says the price increase is due to a worldwide shortage brought about by three years of drought in the Mediterranean basin.

“There has been drought in Tunisia, Spain and Italy,” he says. “It’s very serious. The trees are stressed out and the amount of oil farmers are getting from the olives is greatly reduced.”

Normally, there is a reserve of oil that producers carry over from one year to the next, but Sullivan says that three straight years of production falling short of consumption have used that up. Normal worldwide consumption of olive oil is approximately 1.8 million tons. This year’s projected production is 1.4 million tons.

But in Italy, says Marc de Grazia, a Florence-based exporter of premium Italian wines and olive oils, there have been no price increases. And any shortages he’s seen have been the result of the torrential rains of last November--just at the start of the olive harvest.

“What we saw this year in Tuscany was a very plentiful harvest, but the actual quantity of oil was extraordinarily low,” he says. “In very fine olive oils, the average olive is about 17% to 20% oil. Down south, it can even be up to 30% and more. This year, we had a very abundant harvest, but the average oil content was down to 12% to 13%. We’ve never had it that low before. It’s because the olives were bloated from the rains. The oils from that harvest are much softer and less spicy/peppery than Tuscan oils usually are.”

Darrel Corti, owner of Corti Bros. grocery store in Sacramento and one of this country’s most knowledgeable experts on Italian food and wine products, says there’s no shortage at all. What’s going on, he says, is a combination of European politics and oil company business as usual.

“What there is for 1995, is the removal of the EEC [European Economic Community] subsidies to olive growers and oil producers,” he says. “Now oils are having to be sold at prices that reflect what it actually cost to produce them. That’s making a great deal of waves in the market.”

And, he reminds, the business of olive oil is a slippery one. “No matter what happens, you can be sure that all of the people who deal in olive oil in large quantities will have stocks of oil that they can blend into next year’s oil to meet the demand.”