“The ground is dry due to an almost total lack of rain since January”, explains Cristóbal Cano, secretary general of the Federation of Small Farmers of Andalusia (southern Spain), the center of the culture of olive tree in the country.
This 40-year-old, who owns ten hectares of olive trees in Alcala la Real in the south of the country, has never witnessed such a worrying situation in his twenty-year career. “If we don’t see a radical change in the next few weeks, we will be facing a disaster,” he warns.
The local meteorological service indicates that the amount of precipitation accumulated since October 1 is 25% below normal levels throughout Spain, and 50% in much of Andalusia, where water reservoirs reached only 25% of their total capacity.
This glaring lack of precipitation was exacerbated at the end of April by an exceptionally early heat wave. An all-time high for the month of April was recorded on the Spanish mainland in Cordoba, Andalusia, with a temperature of 38.8°C, similar to levels normally recorded in August.
The director of the Association of Producers and Exporters of Olives, Rafael Picot, recalls that this situation “coincided with the blooming of the flowers” of the olive trees, expressing his fear that the flowers of the trees could wither. “Without flowers there is no olive, and without olives there is no oil,” he says.
“on the edge”
For Spain, which normally supplies the world with 50% of the world’s olive oil, with exports of almost three billion euros per year, the situation is all the more worrying as the sector is emerging from a catastrophic situation for the 2022-2023 season.
Due to water shortages and extreme temperatures, Spanish olive oil production has stabilized at 660,000 tons, compared to 1.48 million tons in 2021-2022, down 55%, according to the The Minister of Agriculture.
The same scenario is expected to repeat itself this year. “Given the weather forecast, it’s almost clear: we are on our way to another dark year,” said Rafael Sanchez de Puerta, managing director of Spain’s main olive cooperative “De Cob”.
This puts many farms at risk. “You can take a bad year, it’s part of the ups and downs of agriculture, says de Puerta. But with two bad years in a row, it’s catastrophic. Many people are already on the edge of the abyss.”
Whether it’s buying machinery, paying salaries or repaying loans, “farmers need money to stay active”, says Rafael Picot, who believes that “the whole sector will suffer”. “In Spain, olive oil provides a livelihood for many people,” he says.
Rising prices For consumers, the outlook is also bleak. “The international price of olive oil depends to a large extent on what happens in Spain,” explains Rafael Picot, anticipating tensions in the market.
In recent months, prices have jumped significantly. Fanny de Gasquet of the Bayonne Intercore brokerage firm notes that “olive oil was selling in mid-April at 5,800 euros per ton, while it was at 5,300 euros in January 2023” and “3,500 euros in January 2022”.
This trend should continue. And in Andalusia, young olive trees do not have “roots sufficiently developed to draw water” from the depths. De Gasquet expects “losses” with an impact on production for “two or three years”.
In this context, the Spanish government reduced the value added tax on olive oil from 10% to 5% at the end of 2022, as part of the anti-inflation plan. To support drought-affected farmers, the sector’s income tax has also been reduced by 25%.
But these measures were deemed insufficient in the face of the looming crisis. “Lowering the income taxes of people who have almost nothing will not help much,” said Rafael Sanchez de Puerta, calling for a broader plan to fight “the drought that will continue”.
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