Officials in Spain Optimistic Ahead of Harvest as Prices Remain Elevated

Summary

Spain is expected to have a sig­nif­i­cant rebound in olive oil pro­duc­tion after two poor har­vests, with an esti­mated 1.4 – 1.45 mil­lion tons in the upcom­ing crop year. Despite some weather chal­lenges, the improved pro­duc­tion is antic­i­pated to bring relief across the sup­ply chain, with prices at ori­gin expected to return to more nor­mal lev­els.

Olive oil pro­duc­tion in Spain is expected to rebound sig­nif­i­cantly after two con­sec­u­tive his­tor­i­cally poor har­vests, bring­ing relief across the sup­ply chain.

According to Juan Vilar, the chief exec­u­tive of Vilcon, a con­sul­tancy, Spain is antic­i­pated to pro­duce between 1.4 and 1.45 mil­lion tons in the 2024/25 crop year, a down­ward revi­sion from his pre­vi­ous esti­mate of 1.65 mil­lion.

Dusan Kaljevic, the chief exec­u­tive of Filippo Berio North America, esti­mated that Spain would pro­duce about 1.5 mil­lion tons.

“Winter was the ideal one,” he said. ​“It was not too cold or hot, which is best for the olive oil incu­ba­tion. We had a lot of lit­tle fruits flow­er­ing on the trees. Most impor­tantly, we had a per­fect level of rain­fall in January and February.”

As a result, water reserves rebounded sig­nif­i­cantly in Spain, which has helped espe­cially the country’s many non-irri­gated groves.

After pro­duc­ing an aver­age of 1.41 mil­lion tons per annum in the five har­vests lead­ing up to 2021/22, con­sec­u­tive years of drought and high spring tem­per­a­tures led to mas­sive fruit loss in Andalusia and the result­ing col­lapse in Spanish pro­duc­tion to 665,800 tons in 2022/23 and 852,600 tons the year after.

Andalusia is expected to pro­duce about 1.1 mil­lion tons of olive oil this year, with sig­nif­i­cant rebounds in Jaén and Córdoba, the autonomous community’s two largest olive oil-pro­duc­ing provinces.

Production in Jaén is expected to reach 445,000 tons, a 116 per­cent increase com­pared to last year. Córdoba is also antic­i­pat­ing a har­vest of 271,000 tons, a 79 per­cent increase com­pared to 203/24.

Seville and Granada also saw sig­nif­i­cant pro­duc­tion increases, yield­ing 125,000 and 103,300 tons respec­tively. The other four provinces in the autonomous com­mu­nity will account for 76,700 tons.

However, Vilar said a lack of rain at the end of sum­mer and begin­ning of autumn, paired with some extreme weather events, had reduced the pre­vi­ously even more opti­mistic pro­duc­tion out­look.

“There was a prob­lem with bad hail,” he said. ​“Then, there was also a prob­lem with a series of heat waves dur­ing the pre­vi­ous months. The weather in Spain has been neg­a­tive for the evo­lu­tion of the har­vest trend.”

Despite the sig­nif­i­cant win­ter and spring rains, Vilar noted autumn in Andalusia has been drier and hot­ter than usual. ​“This will cre­ate con­di­tions that are not the most suit­able for a good cam­paign,” he said.

Still, Juan Jimenez, the chief exec­u­tive of Jaén-based Green Gold Olive Oil Company, said the spring and win­ter rain made all the dif­fer­ence.

His com­pany started har­vest­ing at the begin­ning of the month for an early har­vest brand and will fin­ish the har­vest after the rest of the olives reach verai­son later in the year.

“The har­vest is notice­ably bet­ter for dif­fer­ent rea­sons,” Jimenez said. ​“The olive grove has been very rested after two years with­out, or with lit­tle fruit; there has been bet­ter rain­fall, less extreme weather and at the key moments for the olive grove (flow­er­ing, fruit set and stone-set­ting), the weather has behaved as usual.”

Andrea López Vericat, the chief exec­u­tive of Sucersores de Hermanos López in the neigh­bor­ing province of Córdoba, said she expects an ​“aver­age har­vest” this year after the fam­ily com­pany expe­ri­enced its ​“worst har­vest in the last 20 years” last year.

“This year’s har­vest will undoubt­edly be much higher than last year’s, but it is still too early to [tell how much bet­ter],” she said. ​“There are still many months left until the end of the cam­paign, and there are always vari­ables that can mod­ify oil pro­duc­tion: weather, pests, and indus­trial per­for­mance.”

Depending on the weather, Sucersores de Hermanos López expects to begin har­vest­ing at the end of the month.

While the har­vest will remain below the his­toric highs at the end of the last decade, Vilar said it will bring sig­nif­i­cant relief across the sup­ply chain.

“The upcom­ing cam­paign will be very good for all oper­a­tors in the sup­ply chain,” he said. ​“Farmers are rel­a­tively happy. Oil mills are also rel­a­tively happy. Bottlers will have greater avail­abil­ity. Consumers will have bet­ter prices, and large retail­ers will make money because more oil is avail­able.”

According to Spain’s Ministry of Agriculture, Fisheries and Food, Spain fin­ished the 2023/24 crop year on September 30^th with 186,303 tons of olive oil stocks.

Asaja Jaén, a farm­ers’ union, said this amount would meet demand until the first olive oil from the cur­rent har­vest flows into stor­age tanks at the end of November and December.

For his part, Vilar said he expects price at ori­gin fluc­tu­a­tions to mir­ror the weather. Since reach­ing record-high lev­els in January, extra vir­gin, vir­gin and lam­pante olive oil prices have fallen sig­nif­i­cantly.

The sharpest decline came dur­ing March after sus­tained rain and sea­son­able tem­per­a­tures resulted in excel­lent flow­er­ing and fruit set con­di­tions. Prices steadily climbed over the spring as olive oil sales remained high and stocks declined.

The first esti­mates of poten­tially 1.65 mil­lion tons in mid-June resulted in prices falling to their low­est lev­els since July 2023.

Indeed, drier weather and news of extreme events in Jaén and Catalonia saw prices rise again before falling at the begin­ning of October as early har­vests began in Spain and Portugal.

“The har­vest does not begin in Portugal until mid-October, where pro­duc­tion is expected to be 180,100 tons,” he said. ​“Spain’s har­vest will not start until November 15^th, so through­out October, we will have to use the olive oil stock in Spain until November. Depending on the cli­mate, prices could rise slightly before the har­vest begins.”

According to InfaOliva, extra vir­gin olive oil prices are cur­rently €6.733 per kilo­gram, 25 per­cent below the January high. Virgin and lam­pante olive oil prices have fallen sim­i­larly.

López and Jimenez are look­ing for­ward to prices at ori­gin return­ing to more nor­mal lev­els. Both pro­duc­ers said they noticed some cus­tomers stopped pur­chas­ing extra vir­gin olive oil as prices soared to his­toric highs.

“We should be able to take advan­tage of this moment to develop these new projects and expand our mar­kets and cus­tomer pen­e­tra­tion,” Jimenez said.

“If prices mod­er­ate, it will be impor­tant for peo­ple who have stopped buy­ing extra vir­gin olive oil to start con­sum­ing it again, and in gen­eral, it will be a prod­uct that is not miss­ing from the shop­ping bas­ket,” López con­cluded.

• Europa Press