The severe heatwaves and prolonged drought dominating the summer in Spain could profoundly undermine the country’s olive oil production, Luis Planas, the Spanish minister of agriculture, fisheries and food, has warned.
“If there is no temperature relief or rains in the coming weeks, this year’s olive harvest could be notably lower than previous ones,” Planas told Bloomberg News last week. “The olive sector is concerned about oil production.”
As Spain accounts for the lion’s share of global olive oil production, these reductions would see a significant tightening in global availability.
However, the minister provided no figures to quantify the expected reduction in the coming olive oil crop if unfavorable weather conditions persist in the country. According to International Olive Council data, the world’s largest olive oil-producing nation yielded 1.3 million tons in the 2021/22 crop year.
Planas also noted that the forecasted decline in olive oil production in Spain is likely to keep prices of vegetable oils, including Ukrainian sunflower oil, at high levels.See Also:2022 Harvest Updates
Meanwhile, the Association of Young Farmers and Ranchers (Asaja) in Andalusia expressed concern that olive oil production may fall by a third in the current crop year. The association expects the overall yield to reach a mere 1 million tons in the 2022/23 crop year.
However, Asaja added that the existing Spanish stocks of olive oil – currently exceeding 500,000 tons – could counterbalance the projected production loss for domestic and foreign markets.
Market analysts have suggested that the Spanish olive oil sector could also face consecutive reductions of 25 to 30 percent in the quantity of olive oil produced in the coming years.
Additionally, the quality of the Spanish olive oil next season is yet another concern for the sector.
“As Spain accounts for the lion’s share of global olive oil production, these reductions would see a significant tightening in global availability,” Kyle Holland, an analyst at market research group Mintec, said. “Looking forward, market participants are expecting prices to continue to rise unless the weather improves and gives crops some respite.”
“There are also major worries in the market regarding the quality of the coming crop and what proportion of the crop will make extra virgin/virgin grades and how much will be classed as lampante [not fit for human consumption],” he said.
Spain is yet another major Mediterranean olive oil producer hit hardly by the unnaturally long-lasting hot and dry weather this summer.
In Italy, the second-largest producer in the world, the driest conditions in 70 years have already made producers scale back their initially high expectations of a substantial olive oil yield next season.
At a global level, production of olive oil is expected to slip to 2.92 million tons in the 2022/23 crop year, the United States Department of Agriculture (USDA) has forecasted, down by 11 percent compared with the 3.28 million tons produced previously.