Another Poor Harvest in Andalusia Predicted

Summary

Olive oil pro­duc­tion in Andalusia is expected to reach 550,600 tons in the 2023/24 crop year, a 7 per­cent increase from last year but 40 per­cent below the aver­age of the pre­vi­ous four years. The poor har­vest in Spain is likely to lead to a fur­ther increase in olive oil prices glob­ally, with demand con­tin­u­ing to exceed sup­ply and impact­ing pro­duc­ers and con­sumers alike.

According to a pre­lim­i­nary esti­mate from regional author­i­ties, Olive oil pro­duc­tion in Andalusia may reach 550,600 tons in the 2023/24 crop year.

The har­vest in the world’s largest olive oil-pro­duc­ing region is expected to rise 7 per­cent com­pared with last year’s his­toric low but would be 40 per­cent below the aver­age of the pre­vi­ous four crop years.

According to the Spanish Ministry of Agriculture, Fisheries and Food’s pre­lim­i­nary esti­mate, olive oil pro­duc­tion could reach 765,400 tons in the coun­try, 15 per­cent above last year’s yield but 34 per­cent below the aver­age of the pre­vi­ous four crop years.

Farmers across Andalusia once again expe­ri­enced high heat in the spring, fol­lowed by a hot and dry sum­mer, reduc­ing the quan­tity of olives on the trees and hin­der­ing oil accu­mu­la­tion.

“Fundamentally, it was a slightly bet­ter cam­paign than the pre­vi­ous one,” Carmen Crespo, Andalusia’s agri­cul­ture min­is­ter, told Agropopular. ​“But it is true that in these last two cam­paigns, due to the drought,” have been below aver­age.

However, some provinces in Andalusia are expected to fare bet­ter than oth­ers.

In Jaén, the largest olive oil-pro­duc­ing province in Andalusia, this har­vest is esti­mated to yield 215,000 tons, 20 per­cent above last year’s yield but 46 per­cent below the aver­age of the pre­vi­ous four crop years.

“This year, we have a pro­duc­tion out­look, from what we can see in our olive grove, slightly higher com­pared to 2022/23, but still well below aver­age pro­duc­tion in a nor­mal sit­u­a­tion,” the qual­ity and pro­duc­tion team of Aires de Jaén told Olive Oil Times.

They added that the com­pany pro­duced 40 per­cent less olive oil in 2022/23 than in an aver­age sea­son. This year’s har­vest is set to get under­way by the third week of October. The pro­duc­tion team said it focuses on an early har­vest to max­i­mize qual­ity.

“On the other hand, thanks to the max­i­mum care that our olive grove has received, we are notic­ing, in the first tests, that the qual­ity of the fruit is supe­rior to that of pre­vi­ous years,” they said.

“The del­i­cate sit­u­a­tion of the olive sec­tor this year will be sim­i­lar to last year due to the drop in pro­duc­tion that we con­tinue to main­tain in the face of the high demand,” the team added.

Along with Jaén, author­i­ties expect Almería’s pro­duc­tion to rebound by 20 per­cent com­pared to last year, ris­ing to 13,000 tons, just shy of the 13,232-ton aver­age of the pre­vi­ous four crop years.

Rafael Alonso Barrau, the com­mer­cial and export direc­tor of Almería-based Oro del Desierto, told Olive Oil Times that the olive har­vest is always chal­leng­ing in the province’s arid micro­cli­mate.

“The har­vest is look­ing very lim­ited, although good qual­ity fruit and oil have been obtained,” he said. ​“This year, we face a very com­plex har­vest due to the weather, prices and the mar­ket in gen­eral.”

Alonso Barrua cited the unusu­ally hot autumn that south­ern Spain is expe­ri­enc­ing as the main chal­lenge he expects to face as his har­vest begins.

“On our farm, we will har­vest every­thing in October, and other farms that we col­lab­o­rate with for our sec­ond brand will do so in November,” he said.

Olive oil pro­duc­tion is expected to remain roughly the same in Andalusia’s other six provinces. After Jaén, Córdoba is the sec­ond-largest pro­duc­ing province, with this year’s har­vest esti­mated to reach 143,000 tons, about the same as last year and 37 per­cent below the aver­age of the pre­vi­ous four crop years.

“The har­vest will be more or less like the last one, maybe a lit­tle more, but not much,” María Carmen Rodriguez Comino, the sales man­ager of Córdoba-based Almazara de la Subbética, told Olive Oil Times.

She also cited the unusu­ally high tem­per­a­tures as a chal­lenge that the 8,000-member coop­er­a­tive was likely to face when the har­vest gets under­way in a few weeks.

“We have had very high tem­per­a­tures for a month, more typ­i­cal of August than October, so it is very dif­fi­cult to work in the field at almost 40 ºC,” she said. ​“Of course, these tem­per­a­tures are not good. If you add high tem­per­a­tures to the lack of water, we have the prob­lem that the olives begin to dehy­drate.”

According to Juan Vilar, a strate­gic con­sul­tant for the olive oil sec­tor and pro­ducer based in Jaén, the poor har­vest in Spain will likely con­tinue push­ing olive oil prices fur­ther up.

“On a global level, pro­duc­tion will reach 2.4 mil­lion tons, cre­at­ing a worse sce­nario than last year,” he told Olive Oil Times. ​“It is a worse sce­nario than last year because we have fewer olive oil stocks than last year, while demand remains at about 2.8 mil­lion tons.”

In its autumn 2023 short-term agri­cul­tural out­look report, the European Commission said exist­ing olive oil stocks are 12 per­cent lower this year than last year. With another poor har­vest antic­i­pated across Europe, demand is likely to con­tinue out­strip­ping sup­ply, keep­ing upward pres­sure on prices.

“The world is miss­ing 400,000 tons of olive oil; the poten­tial demand is much higher than total sup­ply,” Vilar said. ​“This will mean that you will con­tinue to see price ten­sions and that con­sump­tion will dete­ri­o­rate more.”

Unless the con­ti­nent receives plen­ti­ful rain this win­ter, Vilar pre­dicted that prices at ori­gin would con­tinue to rise well into 2024.

In Andalusia, ris­ing olive oil prices at ori­gin often mean pro­duc­ers who buy olives from other grow­ers are also pay­ing more for those olives.

“For the acqui­si­tion of olives from con­tracted farms, it is an adverse sit­u­a­tion due to the high pur­chase price that must be offered,” Alonso Barrua said. ​“We under­stand that with a 50 per­cent drop in pro­duc­tion, the price will inevitably dou­ble, but finan­cially, it is com­plex in the cur­rent sit­u­a­tion and sales at higher prices can suf­fer quite a bit.”

“The same thing hap­pens through­out the chain where, due to the high price at ori­gin, mar­gins are reduced, and sales will surely do so as well,” he added.

In an aver­age crop year, Andalusia accounts for roughly three-quar­ters of Spain’s annual olive oil exports. Companies heav­ily reliant on exports have said they see demand declin­ing as global olive oil prices at retail also rise.

“Price insta­bil­ity and con­tin­u­ous price increases cre­ate prob­lems and loss of cus­tomers,” Rodriguez Comino said. ​“Especially abroad where they do not under­stand the sit­u­a­tion well, and it cre­ates loss of clients.”

However, the pro­duc­tion team and Aires de Jaén said Spanish con­sumers remained fiercely loyal, pur­chas­ing domes­ti­cally-pro­duced olive oil despite ris­ing prices.

“Domestic con­sump­tion has not been affected; the national mar­ket is made up of con­sumers loyal to this fun­da­men­tal pil­lar of the Mediterranean diet,” they con­cluded. ​“On the con­trary, the new emerg­ing inter­na­tional mar­kets of recent decades have slightly reduced their con­sump­tion with ris­ing prices.”

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