As some Mediterranean nations face shortages of olive harvests, Spain has seen increasing yields and extended its position as the global olive oil leader.
Centered in the Mediterranean region, the global olive oil industry is wrangling with production issues stemming from changing climate patterns that have negatively impacted crops, most notably in Italy. Yet, as harvest yields fall in some nations, Spanish production is growing at unprecedented speeds, with Spanish olive oil production expected to reach 1.76 million tons in the 2018-2019 season, up from 1.39 million tons the preceding season, according to the Olive Oil Times.
In an unexpected turn of events brought on by a mix of cold snaps, heavy rains, and plant pathogens that have crippled Italy’s main olive-producing regions, Spain has largely benefited from changing weather patterns. The bittersweet news brings promising signs for global olive oil production, which will remain steady thanks to increased Spanish yields, but also ensures the nation will maintain dominance in the international olive harvests. At 6.6 million tons per year, Spain produces just under one-third of the world’s olives, according to 2017 statistics from the United Nations Food and Agriculture Organization. Spain is followed by Greece, at 2.7 million tons; Italy, with 2.6 million tons; and then Turkey and Morocco—five countries that together account for more than 70% of the world’s olives. Since ancient times, the territory occupied by modern-day Spain has been a crucial center of olive production, which has supplied the Mediterranean region with more than 200 varieties of olives. Today, Spain is home to roughly 300 million olive trees and continues a long tradition of exporting precious olives and olive oil to nations throughout the world, through a vital economic sector that has been a staple crop of Spanish agriculture for centuries. According to Spain’s Ministry of Agriculture, Fisheries, and Food, olive oil industry turnover exceeded EUR2 billion in the 2017-2018 season, and figures are expected to grow significantly in 2019. In addition, Spanish olive oil production is expected to increase by 10% by 2026, according to EU projections. Though domestic olive oil demand is decreasing slightly in Spain, export trends remain positive as Spain has a particular advantage in the production of organic olive oil. More than one-third of Spain’s organic agriculture is dedicated to the production of organic olives, securing Spain’s place in one of the fastest-growing segments of the international olive oil market. A significant obstacle for Spain and other EU olive producers is proposed tariffs from the US. In response to a recent ruling by the World Trade Organization on unfair subsidies for Airbus, the Dutch plane manufacturer, a number of EU products, including olive oil, may be hit with USD11 billion in import tariffs. The prospects would prove challenging for the Spanish economy, as more than one-third of EU olive oil exports are destined for the US. According to Eurostat, 35% of EU olive oil exports with an estimated value of USD339 million were destined for the US in 1Q2019. During this period, Spain led US-bound exports with 35,323 tons. But analysts have said European olive oil exporters would be reasonably shielded from the implementation of such tariffs, as the bulk of EU olive oil is exported elsewhere, most notably to Brazil and the Middle East. In the short to medium turn, Spanish oil production will continue to grow, so much so that industry observers have noted the increased output has led to a decrease in global olive oil prices. Between February 2018 and March 2019, the average price of Spanish olive oil fell 30% due to oversupply. Yet, as Mediterranean weather patterns continue to change, the price is expected to fluctuate accordingly.