Unless these kids already have a programming proficiency, go with your gut.

The exercise is as much about allowing them to test the programming waters as it is about them winning. If you are starting with a blank slate, that means you need to create an environment that is intriguing. If YOU think Python is the thing, you'll be passionate ... and that is a lot of what makes a good coach/tutor in an olympiad.

Further, I think you could do a lot worse than Python. It is really a great language and is popping up in a lot of disciplines as the scripting tool of choice. It will perform well and has great characteristics that make it well suited for someone learning the ropes. Plus, the language is modern enough to be relevant should they desire to pursue IT further.

I would stay away from C/C++. In the hands of novices in a timed activity, I would wager it would be more trouble than it's worth.