By Andrew Rosenbaum and Bahattin Gonultas

ANKARA 

The price of a liter of Italian olive oil rose 121 percent year-on-year in December 2014, according to a recent report by researchers at Mintec.

Mintec predicts a rise of up to 50 percent in coming months for extra-virgin olive oil in most markets. Globally, olive oil of every type has risen in price about 40 percent in the past year, the report says, and Mintec expects the price to keep going up in 2015.

What will this cost Turkish consumers?

The price is set to rise by up to 20 Turkish lira per liter, according to research by the consultancy Olive Oil World.

This raises critical issues for Turkish producers. The head of the Union of Aegean Olive and Olive Oil Exporters, Gurkan Renkilag, told The Anadolu Agency that Turkey risks losing foreign markets for its olive oil.

"You can buy olive oil for less than €3.62 ($1.57) from producers in Turkey," he added. That makes Turkish olive oil prices one euro higher than those of other European markets. 

- Why is the price so high?

Spain is the world's largest producer of olive oil, with about 50 percent of the global market, according to Mintec. 

"The prolonged drought seen over the summer in top global producer Spain has damaged a large number of olive trees and severely reduced this year’s crop," explained James Hutchins, an industry expert with Mintec in London.

Then, over the summer, Italy, the second largest producer, had warm, humid weather conditions that brought on an olive-eating fruit fly and some dangerous bacteria. 

"Both have severely damaged crops in many areas and recent autumn hail storms have added to the problems facing Italy’s olive oil producers," Hutchins said.

What is more, producers are reportedly holding onto their stock with the expectation that the prices will rise even higher. 

"I have been working for 60 years in the sector and I never had a season like this. Product exists but there is no export," Renklidag said.

 - Turkey suffers from low production

The harvest of olives and olive oil in Turkey is not near the usual level like other agricultural products because of drought, Cahit Cetin, chairman of the Turkish Olive and Olive Oil board, told The Anadolu Agency. 

"This year, Turkey's National Olive and Olive Oil Council forecast a harvest of over 190 metric tons of olive oil, but it does not seem possible," Cetin said. That is about three-quarters of the usual harvest, he pointed out.

Turkey has invested in its olive growing sector. The total number of trees has increased from 90 million to 170 million thanks to subventions of the Ministery of Food, Agriculture and Livestock.

The ministry has determined a goal for the olive growing sector to produce 700 metric tons of olive oil in coming years. Turkey can realize 350,000 to 400,000 metric tons of olive oil with its new plantation areas and raising existing trees, according to the ministry.

But the industry has to get through this difficult year. 

- Convincing consumers

Why will consumers buy more olive oil even though olive oil prices are too high?

"We have to ensure that consumers use more olive oil because of its health benefits," Cetin said.  "We are making efforts of this kind in the West." 

Some government support is expected to help us reduce prices, Cetin added.

But he admits that it is a global challenge for all the olive producers.