An official for one of Spain’s main agricultural unions argues that steadily rising global consumption paired with a decrease in production may lead to more demand for Spanish olive oil and cause prices to rise.
The agricultural association estimates that Spain will produce between 1.4 and 1.5 million tons of olive oil in 2020/21, a slight improvement from last year’s total of 1.25 million tons.See Also: 2020 Harvest Updates
Cristóbal Cano, the head of olive oil at UPA, said that the olive harvest was initially expected to be larger, but poor weather in recent months has dried up these prospects.
“In our country, after a very dry autumn and winter, the spring rains gave the production sector a break,” he said. “However, the development of the summer has been very negative, with heat waves that are reducing the olive production estimates day-by-day.”See Also: Industry Data Dashboard
In spite of many producers preparing for less of a rebound than previously expected, Cano believes that declining global production may actually have a positive impact on the country’s struggling olive oil sector.
The United States Department of Agriculture (USDA) has estimated that global olive oil production will reach 3.03 million tons in the 2020/21 crop year, marking a third consecutive year of decline.
Among the countries expected to take the biggest hits are Turkey and Tunisia, both of which are coming off near-record harvests and combine for more than one-quarter of global olive oil exports.
Along with declining production, the USDA also predicts that global olive oil consumption will continue to grow between two and four percent. This has led UPA to estimate that Spain’s olive oil stocks will fall by 20 percent, finishing the year at 400,000 tons.
Cano argues that this combination of factors has the potential to benefit Spanish producers. Lower production levels in Turkey and Tunisia mean more space in the export market for Spanish oils.
“It only remains to be seen if this situation of dominance of our oils in world production will take place with a fair distribution of the value of the product along the chain, or if again, the production sector suffers ruinous prices,” Cano said.