Lack of precipitation and abnormally high temperatures They threaten the future of a key sector for the Spanish economy at this time of year. olive grove. Spain is the world’s largest olive oil producer, but producers fear a situation a real “disaster” in a few weeks if the situation remains the same.
“There has been hardly any rain since January. The ground is very dry,” worried Cristóbal Cano, general secretary of the Union of Small Farmers (UPA) in the southern region of Andalusia, the heart of Spain’s olive oil industry, in statements to the AFP agency.
Owning 10 hectares of olive trees in Alcalá la Real, near Granada, Cano has never seen such a worrying situation in his 20 years of farming.
“If things don’t change radically in the next few weeks, it will be a disaster,” he warns.
According to the meteorological agency AEMET, Accumulated precipitation since 1 October is 25 percent below normal in all of Spain and 50 percent below normal in most of Andalusiawhere reservoirs are at 25 percent of their capacity.
The situation worsened in late April and early May when an early heatwave brought exceptionally high temperatures in many parts of southern Spain, bringing mercury close to 40 degrees Celsius.
“This happened when the olive trees bloomed,” says Rafael Pico, director of Asoliva, the Spanish association of olive oil producers and exporters, who fears the flowers will dry out. “No flower, no fruit. No fruit, no oil.”
‘On the verge of collapse’
For Spain, which normally supplies 50 percent of the world’s olive oil and the situation is even more alarming considering the disaster production in 2021-2022 of the sector, which exports close to 3 billion euros (3.3 billion dollars) every year.
Also in that season, Lack of rain and extreme temperatures caused olive oil production to drop 55 percentThe Ministry of Agriculture figures quoted by AFP increased to 660,000 tons, compared to 1.48 million tons in 2021-2022.
“From the estimates, it’s almost a fact: it will be another gloomy year“, says Rafael Sánchez de Puerta, director of Dcoop, Spain’s leading olive cooperative.
The realization of the predictions could mean the end of many olive fields.
“We may face a tough year. It’s a natural thing in a growth cycle. But disaster two years in a row. Many are on the verge of collapse,” he said.
Taking into account the cost of machinery, the payment of wages and the repayment of loans, “farmers need liquidity” to stay afloat, says Pico de Asoliva, and recalls that many people in Andalusia and other autonomies make a living from olive oil production.
smuggled prices
But the outlook is also depressing for consumers. “The world price of olive oil largely depends on Spain”He remembers Pico.
Oil prices have skyrocketed for several months. “In mid-April, olive oil was selling at €5,800 per tonne, compared to €5,300 in January,” says Fanny de Gasquet of Baillon Intercor, a firm specializing in oils and fats. It was sold for 3,500 Euros in January 2022 and everything indicates that the uptrend will continue.
In Andalusia, young olive trees “do not have roots developed enough to draw water” from deep in the ground, so “There will be losses” that will affect production in the next 2-3 yearshe warns.
Faced with this situation, the Spanish government has decided to reduce VAT on olive oil from 10% to 5% by the end of 2022 as part of a package of measures to help consumers in the face of galloping inflation.
And to help farmers cope with the drought, the government lowered the industry’s income tax by 25 percent. But for many These measures are insufficient in the face of the approaching crisis.
“For people who will have almost no income, lowering taxes doesn’t do much for them,” says Dcoop’s Sánchez de Puerta. calls for more ambitious measures tackling “a drought that lasts longer than necessary”.
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