Lack of rainfall and unseasonably high temperatures threaten a vital sector of the Spanish economy during this period: the olive groves. Spain stands as the world’s largest producer of olive oil, yet growers fear a genuine disaster in the weeks ahead if conditions do not change.
“There has been almost no rain since January. The soil is bone-dry,” says Cristóbal Cano, general secretary of the Union of Small Farmers in the southern heartland of Andalusia, speaking to AFP.
Owner of 10 hectares of olive trees in Alcalá la Real, near Granada, Cano notes he has never faced a season this worrying in two decades of farming.
“If things do not shift radically in the coming weeks, it will be a catastrophe,” he cautions.
Data from the meteorological service indicates that accumulated rainfall since October 1 is 25 percent below normal across Spain and 50 percent below normal in much of Andalusia, where reservoirs hold just 25 percent of capacity.
The situation intensified in late April and early May when a heatwave sent temperatures soaring in many parts of southern Spain, approaching 40 degrees Celsius.
“This happened at the moment when the olive trees were flowering,” notes Rafael Pico, director of Asoliva, the association of Spanish olive oil producers and exporters. He fears the flowers may dry up. “No flower, no fruit. No fruit, no oil.”
On the verge of collapse
Spain normally accounts for about half of global olive oil production, a figure that makes the current crisis even more alarming given the drought-related disasters of 2021-2022, when the sector generated nearly 3 billion euros in exports annually.
During that season, a lack of rain and extreme heat cut olive oil production by about 55 percent, with the Ministry of Agriculture reporting 660,000 tons produced compared with 1.48 million tons in 2021-2022.
“From the current estimates, it’s nearly certain that this will be another gloomy year,” says Rafael Sánchez de Puerta, director of Dcoop, Spain’s leading olive cooperative.
The likely outcome could spell the end for many olive groves.
“We may face a tough year. It is natural to see growth cycles interrupted, but suffering two droughts in a row pushes many toward collapse,” he adds.
When considering machinery costs, wages, and loan repayments, farmers need liquidity to stay afloat, Pico of Asoliva notes. He reminds readers that many families in Andalusia and other regions depend on olive oil for their livelihoods.
Rising prices and shrinking margins
Looking ahead, the outlook for consumers is also bleak. “Spain largely anchors world olive oil prices,” Pico observes.
Oil prices have surged for months. “In mid-April, olive oil traded at about €5,800 per ton, up from roughly €5,300 in January,” says Fanny de Gasquet of Baillon Intercor, a company specializing in edible oils. That compares with about €3,500 per ton in January 2022, and the current trend suggests further upside.
In Andalusia, young olive trees lack deep roots necessary to access groundwater, implying losses that could affect production over the next two to three years, he cautions.
In response to the crisis, the government cut olive oil VAT from 10 percent to 5 percent through the end of 2022 as part of a broader package to shield consumers from surging inflation.
To help farmers contend with drought, the government also reduced the industry’s income tax by 25 percent. Yet many growers argue that these measures do not go far enough to prevent a crisis.
“For people with almost no income, tax relief does little,” says Dcoop’s Sánchez de Puerta, who calls for bolder steps to address a drought that lasts longer than needed.
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