Changes headline and paragraph 1 with EU outlook, adds detail from paragraph 6
MADRID, Oct 9 (Reuters) – A second consecutive year of drought in southern Spain will keep the country’s olive oil production below average in 2023/24, meaning the European Union faces another year of high prices, official data showed.
Spain, the world’s top olive oil producer, usually supplies about 40% of global output but heatwaves when olive trees were flowering last spring and prolonged drought have reduced the olive harvest.
Spanish olive oil production is likely to reach 765,300 metric tons in the 2023-2024 harvest, up from 663,000 tons in 2022-2023 when output halved, but a third below the rolling four-year average that harvests are generally compared with, the Agricultural Ministry said on Monday.
In the Andalusia region, where about 70% of Spain’s olive oil is made, the official forecast estimates a harvest 40% below average.
The industry is under threat from desertification, and Madrid says more than a fifth of Spanish land is at high risk of becoming infertile.
For the EU as a whole, 2023/24 olive oil production is expected to rise by 9% from last year to 1.5 million tons, supported by a slight recovery in Spain and Portugal and after rain boosted the crop in Italy, the European Commission said in a report.
But coupled with a sharp drop in stocks last season, overall availability in the EU was forecast to decline to 1.4 million tons, down 11% from 2022/23 and a third below the average of the last five years, the Commission said in a quarterly agricultural report released on Monday.
Tight supply and high prices were expected to push down EU consumption by 6% in 2023/24, adding to a 15.5% plunge in 2022/23, the report forecast.
“Olive oil prices are expected to remain at high levels in the upcoming marketing year 2023/24,” said the report, adding prices in Spain’s main producing belt of Jaen had reached record peaks in late August.
The price of extra virgin olive oil in Spain has doubled since the beginning of the year, reaching 8.20 euros ($8.74) per kilogram in September, according to official figures.
Source: Nasdaq News
