Climate Chaos Wreaks Havoc on Chilean Harvest

Summary

Olive oil pro­duc­tion in Chile dropped sig­nif­i­cantly in 2024 due to high tem­per­a­tures and rain dur­ing the har­vest sea­son, result­ing in a 29 per­cent decrease from the pre­vi­ous year. Despite the pro­duc­tion decline, Chilean exporters have taken advan­tage of high prices in Europe and the Americas, with Brazil and the United States being the main des­ti­na­tions for Chilean exports.

Olive oil pro­duc­tion in Chile has fallen to its low­est lev­els since 2013 after high spring­time tem­per­a­tures and rain dur­ing the har­vest ham­pered farm­ers and millers across the coun­try.

“Olive oil pro­duc­tion dur­ing the 2024 sea­son reached 15,000 met­ric tons,” said Gabriela Moglia, the gen­eral man­ager of ChileOliva, a pro­ducer asso­ci­a­tion. ​“This rep­re­sents a decrease of 29 per­cent con­cern­ing the tons of oil obtained in 2023” and is 33 per­cent below the five-year aver­age.

“The main chal­lenges were the intense rains in the har­vest months,” Moglia added.

According to Jorge Astudillo, an olive oil pro­duc­tion con­sul­tant, high win­ter and spring tem­per­a­tures asso­ci­ated with El Niño in the coun­try’s north dam­aged many olive trees as they were blos­som­ing.

“Production in the Coquimbo area, 300 kilo­me­ters north of Santiago, in par­tic­u­lar… has prac­ti­cally come to zero or near zero,” he told A ambos lados de la mesa, a pod­cast. ​“It is a very impor­tant area… Twenty per­cent, if not more, of the pro­duc­tion comes from this area.”

“But in the rest of the coun­try, it was a nor­mal year in terms of pro­duc­tion,” Astudillo added. ​“Although early rain­fall affected the har­vest, and there was frost in other areas.”

Olive grow­ing spans the entire north­ern half of Chile, stretch­ing about 2,000 kilo­me­ters from the Azapa Valley near the Peruvian bor­der to the cen­tral Maule Valley.

As a result, pro­duc­ers on oppo­site sides of the sec­ond-largest olive oil-pro­duc­ing coun­try in the Americas face var­i­ous chal­lenges.

Along with unsea­son­ably warm weather, grow­ers in the north of the coun­try are com­bat­ing Mediterranean fruit fly infes­ta­tions. The inva­sive species, thought to have been intro­duced via smug­gled fruit from Peru, has ​“caused havoc” across olive groves on both sides of the bor­der.

Meanwhile, in the Maule Valley, Las Doscientos gen­eral man­ager José Pablo Illanes said the com­pany expe­ri­enced a 20 per­cent pro­duc­tion decrease, attribut­ing the decline partly to many trees enter­ing an ​‘off year’ in the nat­ural alter­nate bear­ing cycle of the olive tree and some impact from the cli­mate.

The company’s har­vest started in May and lasted for 70 days, longer than usual due to per­sis­tent rains. Even so, Illanes is most con­cerned about the poten­tial for long peri­ods of drought.

“Learning to live with cli­mate change is every­thing,” he said. ​“We know that, above all, the issue of water is what is most wor­ry­ing when look­ing to the future.”

Fernando Carrasco Spano, the chief exec­u­tive of Olivos Ruta del Sol, whose groves are about 100 kilo­me­ters north of the Maule Valley, con­firmed that cli­matic con­di­tions resulted in a lower yield.

“This year, we had a seven per­cent drop in yield,” he said. ​“The olives did not achieve the oil con­cen­tra­tion of pre­vi­ous years. The total kilo­grams of olives were very good, but their yield was very low.”

“The main chal­lenge this sea­son was to bal­ance the har­vest time vs yield,” Carrasco Spano added. ​“On the one hand, we wanted to har­vest early to avoid the risk of frost. On the other hand, we wanted to wait a few days or weeks for the olives to con­tinue accu­mu­lat­ing oil. Ultimately, we achieved a good result and a valu­able 2024 cam­paign.”

Despite the dra­matic pro­duc­tion decline, Chilean exporters have taken advan­tage of con­sec­u­tive poor har­vests in the Mediterranean basin and the con­se­quent his­tor­i­cally high prices in Europe and the Americas.

“During the first half of 2024, that is, from January to June, $38,165,119 (€34,347,980) FOB value were exported, rep­re­sent­ing an increase of 50 per­cent com­pared to the same period in 2023,” Moglia said.

“Regarding the vol­ume of olive oil ship­ments abroad, in the first half of 2024, a total of 4,176 tons of olive oil were shipped, rep­re­sent­ing a two per­cent decrease com­pared to the same period in 2023,” she added.

Brazil and the United States remain the main des­ti­na­tions for Chilean exports, rep­re­sent­ing 58.4 and 23.1 per­cent by value, respec­tively. Spain rep­re­sents the third lead­ing des­ti­na­tion, mak­ing up 7.4 per­cent by quan­tity.

“There has been greater demand from mar­kets like Brazil,” Illanes con­firmed. ​“The fact that pro­duc­tion in Spain has decreased for the last three con­sec­u­tive years due to drought has caused the world’s oil stock to decrease and led to greater demand from nearby mar­kets.”

“Our exports grew by 33.4 per­cent, both in value and vol­ume,” Carrasco Spano added.

Due to steady global demand and dimin­ished pro­duc­tion, olive oil prices in Chile have increased sig­nif­i­cantly.

According to Astudillo, the price for a pro­ducer-branded bot­tled half liter of olive oil is about 7,500 Chilean pesos (€7.30). He esti­mates Chileans con­sume between 900 mil­li­liters and one liter of olive oil per capita.

“The price of bot­tled oils on the shelves [has dou­bled], so the mar­ket has been forced, espe­cially the final con­sumer, to look for larger or cheaper for­mats,” he said.

While no offi­cial data on domes­tic olive oil con­sump­tion have been pub­lished this year, Astudillo added, ​“we see that there is a decrease in con­sump­tion at the local level.”

Still, Illanes said Las Doscientos, which sells about 50 per­cent of its olive oil in Chile, did not see a fall in demand com­pared to the reduc­tion in sup­ply.

“Regardless of the price, which rose a lot, demand never fell in the same pro­por­tion as sup­ply,” he said. ​“Now we know that demand was main­tained while reach­ing these price lev­els. This gives us peace of mind know­ing that peo­ple value olive oil as part of their basic house­hold bas­ket.”