Olive oil prices continued to rise pushing up the cost of Italy and Spain’s top dishes even as headline inflation retreats across Europe.
Bloomberg’s monthly Pizza and Paella indexes, which calculate how much Italian and Spanish households need to spend on ingredients to make the signature Mediterranean dishes, increased 8.2% and 20.6% from a year earlier in September.
That’s well above headline inflation which was 5.6% in Italy and 3.3% in Spain. Italian and Spanish homes were also paying more for vegetables, while the former saw a drop in flour, mozzarella and electricity needed to cook the food and the latter benefitted from lower seafood and fish prices.
What really stands out, however, is the cost of olive oil: In Italy, it was up 43% from a year earlier and Spain saw an even bigger 67% jump.
Soaring olive oil prices in Europe will hold for another season, forcing consumer cutbacks of the beloved staple, the European Commission said last week.
Europe is home to two-thirds of the world’s olive-oil production and is a huge consumer. Prices have roughly doubled in the past year after drought hurt harvests in key growers. Pests and disease have thrived as the climate warms. The run-up has kept the cost of making traditional dishes like pizza and paella high, even as inflation begins to ease broadly for raw foodstuffs.
Food costs have been a driver of inflation across Europe. Still, a global gauge of food-commodity costs published earlier this month was little changed in September, according to the United Nations’ Food and Agriculture Organization. That’s partly down to cheaper vegetable oils, as harvests of sunflowers in the Black Sea region and palm crops in Southeast Asia pulled prices almost 4% lower.
Italians and Spaniards are likely to reject substituting olive oil for another variant in their traditional dishes.
This story was produced with the assistance of Bloomberg Automation.
--With assistance from Mark Evans.
