An ongoing drought and soaring temperatures have unleashed fears of an olive “catastrophe” in Spain, the world’s largest producer of olive oil, which suffered a very difficult year in 2022. According to the AEMET weather agency, accumulated rainfall since October 1 has been 25 percent lower than normal across Spain and 50 percent lower in most of Andalusia, where reservoirs are at 25 percent capacity.
And the situation worsened at the end of April, when an early heatwave brought exceptionally high temperatures that saw the mercury hit 38.8 degrees Celsius in southern Spain. For Spain — which normally supplies 50 percent of the world’s olive oil and exports close to 3.0 billion euros ($3.3-billion) worth every year — the situation is even more worrying given the sector’s disastrous output in 2021-2022.
During that season too, a lack of rain and extreme temperatures saw olive oil production plummeting 55 percent to 660,000 tonnes, compared to 1.48 million tonnes in 2021-2022, agriculture ministry figures show.
The scene is set to play out again this year.
“Looking at the forecasts, it’s almost a given — it’s going to be another grim year,” says Rafael Sanchez de Puerta, head of Dcoop, Spain’s leading olive cooperative. If the predictions prove true, it could spell the end for many olive farms. We can cope with one difficult year. It’s a natural part of the growing cycle. But two years in a row will be a disaster. Many are on the brink of collapse,” he says.
With the cost of machinery, paying salaries and repaying loans, “farmers need liquidity” to remain afloat, says Asoliva’s Pico, recalling that many in Spain live from olive oil production. For consumers, the outlook is also bleak. The global price of olive oil depends largely on Spain,” says Pico. In recent months, the price of oil has jumped.
“In mid-April, olive oil was selling at 5,800 euros ($6,400) per tonne, up from 5,300 euros in January,” says Fanny de Gasquet of Baillon Intercor, a brokerage firm specialising in oils and fats. In January 2022, it was selling at 3,500 euros. And the upward trend looks set to continue.
Source: eNCA
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