Spain's olive oil harvest season 2023/2024: drought, olive oil prices and future expectations

Last week I contacted one of my suppliers and she briefly explained what the situation is in Spain at the moment. Now that it is February 2024 and the harvest season is almost over, I want to share what the Spanish media are writing about the new harvest season and how things are going at the moment.

Spanish harvest season 2023/2024

Now that the harvest season is almost over, production estimates are expected to range from 680,000 to 755,000 tons of olive oil for the 2023/202 harvest year 4, which is lower than expectations at the start of the harvest in November 2023. However, more than the disaster year 2022/2023 where 666,000 tons of olive oil were produced, 55% less than normal .

The cause is clear: the drought. In addition , 70 percent of all olive trees in Spain are not irrigated , so that means there is a high dependence on precipitation. The amount of water in one of Spain's largest rivers, the Guadalquivir, is also at a minimum but about 20 percent of its water reserves are filled. Large olive groves Andalusia lies on the Guadalquivir, like those in the west of the province Jaén , Cordoba and Seville.

Fun fact. My family's olive groves are towards the east. Where the Guadalquivir rises in the Sierra de Cazorla, 2 rivers form. The Guadalquivir and the Segura, the Guadalquivir flows to the west and the Segura to the east. This is also why the DO of my olive oil is called DO Sierra de Segura. I therefore hope that the olive oil harvest in this part will therefore be better for the benefit of the region.

Olive oil prices

Due to the disappointing harvests, the price of olive oil has risen enormously compared to a year earlier. People were more optimistic in December 2023 because of a lot of rain, which was favorable for the growth of olives. During that period it can be seen that prices fell somewhat, but now that we are almost at the end of the season, prices are rising again to record heights.

The Spanish media indicate that prices are expected to continue to rise until at least June 2024. June will be exciting because it will be known then whether the olive trees have had enough water in winter and spring to blossom. That's always a good indicator of whether or not the next season will be good.

Consumption in Spain

What does this mean for the consumption of olive oil? In Spain, the consumption of extra virgin olive oil has fallen dramatically and Spaniards have started consuming 30 to 40% less extra virgin olive oil . Because of the price, people have switched to cheaper types of olive oil such as virgin olive oil and extra virgin olive oil, which are of lower quality. These have not increased in price as much as extra virgin olive oil and are therefore more attractive to buy because of the price.

By the way, the Spanish government has passed a law to recognize extra virgin olive oil as a basic need , which will bring VAT in Spain to 0%. This measure is purely intended to increase the consumption of healthier extra virgin olive oil and stimulate purchasing power.

What does this mean for olive oil producers?

When I asked whether there would be sufficient extra virgin olive oil, olive oil of the highest quality, available in the near future, she replied: “Yes”. Due to the decreased consumption demand, there will be more in stock, but of course at a high price. So the higher price also creates more uncertainty for olive oil producers, who have already been able to harvest very little.

It is of course nice that measures are being taken, but I personally hope that it will rain heavily in the near future and the drought will ease to return to normal conditions. Affordable extra virgin olive oil is good for everyone and that will also help make this liquid gold accessible to a wider audience

Sources:

• Agro Alimentarias
• Agropopular
• Ministry of Agriculture of Spain
• Monclao (Spanish government)
• Juan Vilar consultancy