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Olive ‘catastrophe’ in Spain

MADRID (AFP) – An ongoing drought and soaring temperatures have unleashed fears of an olive “catastrophe” in Spain, the world’s largest producer of olive oil, which suffered a very difficult year in 2022.

“It’s barely rained since January. The ground is very dry,” worries secretary general of the small farmers’ union (UPA) in the southern region of Andalusia Cristobal Cano. Andalusia is the heart of Spain’s olive oil industry.

Cano, who owns 10 hectares of olive trees in Alcala la Real near Granada, has never seen such a worrying situation in the 20 years he’s been a farmer.

“If something doesn’t change radically in the next few weeks, it’s going to be a catastrophe,” he warned.

According to the AEMET weather agency, accumulated rainfall since October 1 has been 25 per cent lower than normal across Spain and 50 per cent lower in most of Andalusia, where reservoirs are at 25 per cent capacity.

And the situation worsened at the end of April, when an early heatwave brought exceptionally high temperatures that saw the mercury hit 38.8 degrees Celsius in southern Spain.

An olive grove outside the Andalusian village of Alcala la Real near Jaen, in Spain. PHOTOS: AFP
An olive branch in Ronda
ABOVE & BELOW: Farmer Cristobal Cano observes his olive grove; and Cano works with his father on their farm in Alcala la Real

“This happened as the olive trees were in bloom,” said director of Asoliva Rafael Pico, who fears the blooms will dry up.

“If there are no flowers, there’s no fruit. And if there’s no fruit, there’s no oil.”

For Spain – which normally supplies 50 per cent of the world’s olive oil and exports close to EUR3.0 billion worth every year – the situation is even more worrying given the sector’s disastrous output in 2021-2022.

During that season too, a lack of rain and extreme temperatures saw olive oil production plummeting 55 per cent to 660,000 tonnes, compared to 1.48 million tonnes in 2021-2022, Agriculture Ministry figures show.

The scene is set to play out again this year.

“Looking at the forecasts, it’s almost a given – it’s going to be another grim year,” said the head of Spain’s leading olive cooperative Dcoop Rafael Sanchez de Puerta.

If the predictions prove true, it could spell the end for many olive farms.

“We can cope with one difficult year. It’s a natural part of the growing cycle. But two years in a row will be a disaster. Many are on the brink of collapse,” he said.

With the cost of machinery, paying salaries and repaying loans, “farmers need liquidity” to remain afloat, said Asoliva’s Pico, recalling that many in Spain live from olive oil production.

For consumers, the outlook is also bleak.

“The global price of olive oil depends largely on Spain,” said Pico.

In recent months, the price of oil has jumped.

“In mid-April, olive oil was selling at EUR5,800 per tonne, up from EUR5,300 in January,” said Fanny de Gasquet of Baillon Intercor, a brokerage firm specialising in oils and fats.

In January 2022, it was selling at EUR3,500.

And the upward trend looks set to continue.

In Andalusia, young olive trees “don’t have sufficiently developed roots to be able to extract water” from deep underground, meaning “there will be losses” that will have an impact on production over the next two or three years, she warned.

At the end of 2022, the Spanish government moved to lower VAT on olive oil from 10 per cent to five per cent as part of a package of measures to help consumers in the face of soaring inflation.

And to help farmers cope with the drought, the government has reduced the sector’s income tax by 25 per cent.

But for many, it’s too little in the face of the looming crisis.

“Lowering taxes for people who will have almost no income is of little use to them,” said Dcoop’s Sanchez de Puerta, calling for more ambitious moves to combat “a drought that is lasting longer than it should”.

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