Italy: Drought threatens olive oil, risotto rice and passata supplies; prices to soar

As northern Italy is witnessing the worst drought in nearly 70 years, the supplies of olive oil, risotto rice and passatas is feared to go scarce adding to the woes of the global food shortage and inflation arising mainly due to Russia-Ukraine war. Italy's crop yields are likely to be impacted to a degree that the prices may go up by a whopping 50%, paricularly the cost of rice and tomatoes is expected to take the toll. Italian farmers at the Po Valley, the home of arborio rice used in Risotto, have told Guardian newspaper that there will be a “significant reduction” in crop yields in 2022 due to severe drought in the European nation.

The paper cited an analyst at market research group Mintec, namely Kyle Holland, who warned that the overall Italian production of olive oil will likely drop by 20% to 30% as compared to the supplies exported last year despite the COVID-19 pandemic supply chain disruption. Import of Olive Oil in India significantly picked up by 54.85% during the period from 2014 to 2018 and the import data suggests that 99.61% requirement of total Olive oil was met from at least five countries last year. 

'Substantial dent in the global supply'

Holland told the paper that there could be a “substantial dent in the global supply” of oil due to production disruption flared by the dry and unfavourable weather in Spain. There could be a minimum reduction of crops by up to 15%. “We are already seeing some olive trees producing no fruit, which only happens when soil moisture levels are critically low,” Holland reportedly informed. Furthermore, he stressed, “according to industry contacts, the lower production and, therefore, limited supply of olive oil is likely to cause prices to increase in the coming months.'' 

In a separate remark, UK managing director of olive oil specialist Filippo Berio told The Grocer trade journal, "Unless it rains very soon, the olive crop will be dramatically reduced.” He also noted that not just Olive oil but the production of apricots, peaches and pears is also likely to suffer. Chief executive of Eurostar Commodities, Jason Bull, iterated meanwhile that the prices of the food commodity exported from Italy will "get very expensive." “Farmers are saying there is no snow on the Alps when there is always snow there, rivers are drying up, the lake is drying up,” Bull told Guardian. “Farmers are carrying on planting but they are worried [crops] are going to rot in the ground as there is no water to feed them," he went on to add. More than 30% of Italy's total agricultural production is now at stake due to the drought. 

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