An Italian labour group is warning that the country’s domestic supply of olive oil could be exhausted by next month, sparking concerns of shortages and sharp price increases in Canada and other parts of the world.

According to British newspaper The Times, agricultural union Coldiretti has said Italy’s domestic olive oil supply will be fully depleted by April.

At issue is a poor olive harvest that has, by some estimates, seen Italian olive oil production drop by 57 per cent, to the lowest level the country has seen in 25 years.

Italian olive oil industry association Italia Olivicola says part of the problem comes from the Xylella bacteria, which has been infecting groves in the Salento region.

The group says four million olive trees in Salento have been destroyed by the bacteria – enough on its own to reduce Italy’s olive production by 10 per cent.

More serious is the situation in Puglia, where approximately 40 per cent of Italy’s olive oil is produced. Coldiretti says 25 million trees in Puglia have been destroyed due to frost and other unusual weather activity over the winter. The union estimates that this has cost the industry 100,000 jobs.

The shortage is impacting prices as well. Italian extra virgin olive oil was selling for 5.83 euros ($8.79) per kilogram as of Feb. 21, up 30 per cent from the same time one year earlier, while prices for Italian virgin olive oil were up by 11 per cent year-over-year.

The Canadian impact

Elena Lepori, who owns Toronto-based Lugano Fine Foods, told Tuesday that while olive oil has yet to disappear from Canadian store shelves, the shortage in Italy is a hotly discussed topic among people in the business.

Some of the retailers Lepori deals with have been asking her if she’s being directly affected by the shortage. She isn’t, she told, because she works with smaller producers – “real people producing real extra virgin olive oil” – instead of the mass-produced facilities responsible for a large portion of Canada’s olive oil supply.

“I haven’t felt any shortage, really, but I work with a very, very select market,” she said.

“The big market, which is most of the industry … comes from the big bottling companies of the world.”

Lepori said she has noticed prices increasing for some of the olive oil coming from those major industry players.

Other Canadian importers have said they’re paying more to bring Italian olive oil into the country – increases they then pass on to their customers. The Canadian Food Inspection Agency warned last month that it was on the lookout for potential olive oil fraud – cases in which other oils are mixed into olive oil and knowingly sold as olive oil regardless.

Looking beyond Italy

Lepori sources all of her olive oil from Italian olive growers. However, while Canadians may typically associate olive oil with Italy, it is also produced in other countries. Spain is the world’s largest producer of the oil, with significant amounts also coming from Greece and Tunisia.

Tunisian economic development authorities promoted Canada last fall as a potential new market for its olive oil, noting that Canada is one of the world’s 10 largest importers of olive oil and that Canadian demand for olive oil is rising steadily, with per capita consumption up 26 per cent over the previous decade at the expense of homegrown canola oil.

According to the Tunisian presentation, Canadians consume more olive oil per capita than Americans, though still significantly less than Europeans. The “multicultural hot spot” of Quebec is said to be Canada’s top region for olive oil consumption.

The growing Canadian demand for olive oil might help explain why an agricultural arm of the European Commission reported last week that olive oil exports to Canada are expected to come in 14 per cent higher by volume in 2018-19 than in the previous year.

This increase was despite the agency revising its production forecast downward, expecting it to come in nine per cent below the 2017-18 level. The report noted that a terrible start to the European harvest had been offset by increased production activity in December and January, primarily in Spain.