Spanish Producers Encounter Losses but Look to Next Season

Summary

In December 2022, olive oil pro­duc­tion in Spain was sig­nif­i­cantly lower than in the pre­vi­ous year, lead­ing to a slow­down in sales due to reduced pro­duc­tion and ris­ing prices. Producers are fac­ing chal­lenges due to the drop in pro­duc­tion, increased pro­duc­tion costs, and the impact of weather con­di­tions on olive farm­ing, with hopes that mea­sures like a decrease in VAT could help boost con­sump­tion and exports.

The lat­est data issued by the Andalusian Food Information and Control Agency (AICA) shows that in December 2022, over­all olive oil yield halved when com­pared to the same month in 2021.

It also con­firmed that the olive oil sales slow­down is asso­ci­ated with both reduced pro­duc­tion and ris­ing prices.

More specif­i­cally, AICA reported that 232.037 tons of olive oil were pro­duced in all of Spain in December. That is sig­nif­i­cantly less than the approx­i­mately 542.600 tons reported in December 2021.

In the first three months of the 2022/2023 sea­son, Spain pro­duced 431.090 tons of olive oil, as reported by the Association of Young Farmers (ASAJA-Jaén).

Luis Carlos Valero, a spokesper­son for ASAJA-Jaén, said that ​“the drop in pro­duc­tion is con­firmed, and that will affect our abil­ity to meet stor­age goals. Such reduc­tion is also asso­ci­ated to a slow­ing down of sales [in December] when com­pared to the pre­vi­ous months.”

In a press note, the Union of Small Farmers and Ranchers (UPA) noted that 322.720 tons of olive oil had been shipped since the new season’s sales began last October. That is 16 per­cent less than the pre­vi­ous sea­son.

According to Cristóbal Cano, UPA sec­re­tary-gen­eral for the olive and olive oil sec­tor, we are fac­ing ​“a com­pli­cated and dif­fi­cult cam­paign, affected by low pro­duc­tion. In short, the worst cam­paign of the cen­tury.”

Cano under­lined that while the decrease is strictly con­nected to the lower pro­duc­tion, ​“the slight con­trap­tion in sales has noth­ing to do with the price of oil.”

Rafael Sánchez de Puerta, pres­i­dent of the olive oil sec­tor at the Agri-food Cooperatives of Spain, noted that while olive oil prices have grown con­sis­tently over the last year, they might have finally reached their peak and are now expected to stay sta­ble.

In this regard, Juan Luis Ávila, sec­re­tary-gen­eral of the Farming Organization Coordination Entity (COAG Jaén), noted that ​“despite olive oil price hikes, olive oil pro­duc­tion costs have grown to €8 per kilo­gram, and that means that [olive oil price] is still below those.”

Olive oil pro­duc­ers have long lamented how the ris­ing costs of energy, fuel, fer­til­iz­ers and plas­tics impact over­all pro­duc­tion costs.

Sánchez de Puerta also pointed to the ris­ing pro­duc­tion costs as one of the main hur­dles for olive oil pro­duc­ers. As reported by Agroinformacion, Sánchez de Puerta argued that the recent rise in prices had to be expected when pro­duc­tion dropped.

“If we want to fight against the rise in the price of oil, we must fight against drought in the olive grove and, for exam­ple, increase the irri­ga­ble area,” he added.

According to data released by the Ministry for Agriculture, Fisheries and Food (MAPA), at the end of 2022, pro­duc­ers, olive oil millers, bot­tlers and the Olivarero Communal Heritage had cre­ated 625.667 tons of olive oil.

Cano noted that the lower pro­duc­tion in December could also be attrib­uted to the fre­quent rain, which has impacted the num­ber of days work­ers can har­vest olives.

“Fortunately, the rain came and set in. However, the rain­fall in recent weeks has not been enough to reverse the bad con­di­tions on the fields, not even remotely,” said Cano, hint­ing at the effects of the pro­longed European drought and heat­waves on olive farm­ing.

“Now we hope that it will con­tinue to rain, that from here to Spring, 350 or 400 more litres of water will come. Should it hap­pen, we could guar­an­tee a nor­mal sea­son, which would help us boost pro­duc­tion for the next har­vest,” he added.

As the pro­duc­tion drop is con­firmed, pro­duc­ers have iden­ti­fied ways olive oil con­sump­tion and export needs could be met. ​“We also hope that the drop in VAT from 10 to 5 per­cent approved by the Government and the lower pro­duc­tion will allow us to increase the num­ber of con­sumers,” Cano con­cluded.

• UPA Andalucia
• Valero
• MAPA