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    Olive Oil Prices Spike Amid Poor Growing Conditions in Spain, Italy

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    A drought in Spain and blight in Italy are detrimental to the top olive oil producers’ upcoming harvests, and a spike in olive oil prices in September is predicted, The Guardian reported.

    MOSCOW, August 26 (RIA Novosti) - A drought in Spain and blight in Italy are detrimental to the top olive oil producers’ upcoming harvests, and a spike in olive oil prices in September is predicted, The Guardian reported.

    "Not even the most optimistic are predicting a million tonnes [1 million metric tons]," David Erice of Spain's Small Farmers Union was quoted as saying by the newspaper. "We're expecting something closer to 2012, when production was around 700,000 tonnes," he added.

    Drought and bumper harvests in Spain are expected to cause a 40 percent decrease in olive harvests. Spain currently produces 50 percent of the world’s olive oil with 73 percent produced in the southern province of Andalusia and 16 percent in northeastern Catalonia, the newspaper reported.

    The anticipation of Spain’s poor October to January harvest has caused the price of olive oil to increase from 2.40 euros per kg to 2.70 euros per kg over the past few weeks on the wholesale market according to the Spanish olive oil federation Infaoliva.

    Projections for September are currently at their highest level since June 2013 and prices could spike by 0.50 euros per liter.

    "There is no cure. The only solution is to burn the infected trees to stop the bacteria spreading quickly," Raffaele Piano, an Italian olive grower, said of the current blight, The Guardian reported. "Prices will rise by 30 percent to 40 percent but quality will not be affected," he added.

    Some 74,000 acres of trees in the region of Puglia in Italy are infected with the bacteria, Xylella fastidiosa an insect-borne bacterium with no known cure, according to The Telegraph.

    Puglia accounts for 180,000 tons of Italy’s 480,000 tons of olive oil exported annually, making it the second largest producer at 15 percent of the world’s supply after Spain.

    Rafael Pico of Asoliva of the oil exporters' association claimed olive oil prices would be worse if Russia had included it in its list of banned agricultural products, The Guardian reported.

    Currently, global demand for olive oil has increased by 60 percent over the past 20 years with increased demand in China, the United States, Canada and Australia.

    Tags:
    embargo, harvest, prices, olive oil, Spain
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