Supermarket giant Foodstuffs is warning of an olive oil shortage and in turn, higher prices at the checkout.

Spain the world's largest producer of olive oil has had extremely dry weather, damaging the harvest of olives for a second year in a row.

Global production of olive oil was expected to fall and be short of global demand.

Foodstuffs North Island head of grocery Jocelyn McCallum said supermarkets had good supply so there was no need to rush out and top up.

"With olive oil being a hugely popular grocery item in New Zealand we're already thinking about solutions and alternatives to help customers get the best value."

"Olive oil represents roughly 40-50 percent of our total oil sales so it's very popular with New Zealanders.

"Over the last six months, we've seen supplier olive oil prices increase by 50-60 percent and as global demand outstrips supply, we can expect supply prices to continue to increase."

McCallum said experts were predicting prices were near the ceiling of the likely increases, however until growers got better conditions and supply levels improved, it was likely supply prices would remain higher than usual.

McCallum said with a smaller supply and higher prices, consumers should consider alternative options.

"When you're choosing your cooking oil, it's a good idea to think about how you're going to use the product. Is it going to be for salad dressing and dips, cooking at high heat, or a general all-rounder."

"For cold dishes like salad dressings and dips, vegetable oils such as canola and regular sunflower will contribute less flavour than olive oil but can bring the same body and texture."

If you were after an all-rounder, canola oil could be a good option due to its versatility and affordability, she said.

With a subtle flavour and high smoke point, it could be used on the BBQ, wok or fry pan and had low levels of saturated fat.

It was also about $10 cheaper per litre than olive oil, said McCallum.

"If you just love your olive oil and can't do without it, consider using a spray bottle to limit how much you use so you get maximum bang for your buck."