Olive Oil Production Expected to Fall Below 1M Tons in Spain

Anticipation of a second-consecutive poor harvest in the world’s largest olive oil producer means prices are likely to keep rising.
By Máté Pálfi
Sep. 28, 2023 14:44 UTC

Olive oil pro­duc­tion in Spain will not exceed 1 mil­lion tons in the 2023/24 crop year, accord­ing to Luis Planas, Spain’s act­ing min­is­ter of agri­cul­ture, fish­eries and food.

However, he said pro­duc­tion would almost cer­tainly sur­pass the his­toric low of 663,000 tons pro­duced in 2022/23, 54 per­cent below the aver­age of the pre­vi­ous four years. Planas added that it was still too early to pro­vide more pre­cise pre­dic­tions.

Officials and pro­duc­ers across the coun­try have blamed the his­toric drought engulf­ing the Iberian Peninsula for the poor har­vest last year and the low expec­ta­tions for this year.

See Also:2023 Harvest Updates

Rainfall in recent weeks has slightly improved the sit­u­a­tion in the olive groves, but many pro­duc­ers warned that it came too late to save this har­vest, instead improv­ing con­di­tions for 2024/25.

Above all, this water will be used to pre­pare next year’s har­vest,” Francisco Vañó, owner of Jaén-based Castillo de Canena, told El Mundo.

While some pro­duc­ers in Andalusia, the south­ern autonomous com­mu­nity respon­si­ble for most of Spain’s olive oil pro­duc­tion, have already started har­vest­ing, the crop year offi­cially begins on October 1st.

Among the pro­duc­ers in south­ern Spain already trans­form­ing olives into olive oil is Málaga-based Finca La Torre. Company man­ager Víctor Pérez told Oleo Revista that, due to the drought, this year’s har­vest started two weeks ear­lier than usual.

He expects to har­vest 350 tons of olives, 12 per­cent less than last year, and pro­duce about 60 tons of olive oil. Despite a lower yield, he said the drought favored higher qual­ity.

The olives have less mois­ture and, dur­ing the oil pro­duc­tion process, it will lose fewer antiox­i­dants,” he said. Thus, the result­ing extra vir­gin olive oil will be more pow­er­ful, bit­ter and spicy, of excel­lent qual­ity and health­ier due to the high polyphe­nol con­tent that we expect.”

While recent rain means that olive oil prices at ori­gin have fallen slightly from record highs – extra vir­gin olive oil dipped from €8.35 per kilo­gram on September 14th to €8.19 at the time of writ­ing – experts expect the upward trend to con­tinue.

Juan Vilar, a Jaén-based strate­gic con­sul­tant for the olive oil sec­tor, told Diario de Sevilla that expec­ta­tions of an unprece­dented sec­ond-con­sec­u­tive his­tor­i­cally low har­vest mean olive oil prices will con­tinue to climb and some con­sumers would cut back on pur­chases. However, he said pre­vi­ously-feared short­ages are unlikely.

At no time will the super­mar­ket shelves be with­out sup­plies,” he said. There will be a series of peo­ple who will not be able to afford the pur­chase of olive oil and there­fore will stop con­sum­ing it or will con­sume it to a lesser extent.”

I wouldn’t be sur­prised if cer­tain oils start sell­ing in super­mar­kets for almost €12,” Vilar added.

The scarcity of olive oil and con­cerns about steadily ris­ing prices resulted in Nadia Calviño, the first vice pres­i­dent and min­is­ter of eco­nomic affairs, call­ing for mea­sures to sta­bi­lize prices.

She urged all stake­hold­ers in the olive oil sup­ply chain to col­lab­o­rate in con­trol­ling prices, as olive oil is a sta­ple in many Spanish house­holds.

The Spanish gov­ern­ment plans to invest €11.8 bil­lion to improve water infra­struc­ture by 2027 to address Andalusia’s increas­ingly hot and dry cli­mate. This invest­ment will focus on desali­na­tion, recy­cling waste­water and pro­mot­ing effi­cient water use through infra­struc­ture improve­ments.

Additionally, €3.06 bil­lion will be allo­cated to dig­i­tal­iza­tion, pro­mot­ing new tech­nolo­gies and data for water and drought man­age­ment.

Along with olive grow­ers, the drought has pro­foundly impacted the coun­try’s entire agri­cul­tural sec­tor. The gov­ern­ment antic­i­pates a record-high num­ber of agri­cul­tural insur­ance claims will be made in 2023.

Compensation is expected to exceed €1 bil­lion for the year, with more than 90 per­cent of the drought-related claims already paid in August. However, many olive grow­ers are set to miss out after pre­vi­ous research found that only 4.5 per­cent of olive groves are cov­ered by crop insur­ance in the coun­try.

The gov­ern­ment has imple­mented mea­sures to sup­port farm­ers impacted by the drought, includ­ing €636 mil­lion of direct aid pay­ments, insur­ance sub­si­dies and tax cuts for pro­duc­ers who lose 20 per­cent or more of their crop.


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