The Jaén chapter of Cooperativas Agro-alimentarias, Spain’s leading agricultural cooperative, estimates that the world’s largest olive oil-producing province could lose up to €1 billion in the coming olive harvest if current conditions remain the same.
The organization said the province would produce 230,000 tons of olive oil in the coming crop year, significantly down from the 499,796 tons produced in the 2021/22 crop year, representing 38 percent of all Spanish olive oil production.See Also:Olive Harvest in Valencia Predicted to Fall by 75 Percent
Higinio Castellano, the president of Cooperativas Agro-alimentarias Jaén, blamed the extreme drought from which the region is suffering for the poor harvest expectations. He added that the problem could become even worse if no rain falls between now and the start of the harvest.
Although Jaén experienced a similar harvest in the 2014/15 crop year, the worst year for producers in the past decade, Castellano warned that this year’s production drop would have more profound economic impacts.
Production costs have risen significantly in 2022, fueled by increasing prices for fertilizer, phytosanitary products and energy prices. As a result, Cooperativas Agro-alimentarias has called on Spain’s federal government to lower taxes on these inputs ahead of the start of the harvest in October.
Castellano added that water use restrictions have also impacted the province’s rainfed groves and called on authorities to lift a ban on water canons in non-irrigated groves.
The estimates from Cooperativas Agro-alimentarias come soon after Deoleo, the world’s largest olive oil bottler, announced a significant decline in profits and local authorities in Jaén approved a €10 million employment plan to offset wages lost by olive pickers this harvest.
Spain’s ongoing drought has also slowed the sector’s momentum. In July, olive oil sales reached 135,000 tons, 13 percent above the same month in 2021.
Olive oil exports fueled a trade surplus in the first half of 2022 in Andalusia, the autonomous community in which Jaén is located. Producers and bottlers exported €1.3 billion of olive oil in the first five months of the year, an increase of about 23 percent compared with the same period in 2021.
For their part, producers have already adjusted their prices, which are 15 percent higher than they were a year ago, to make up for what will almost certainly be a poor harvest.