Olive oil prices are skyrocketing this summer. In Catalonia, the extra virgin category exceeded eight euros per liter in mid-July, according to data from the Ministry of Agriculture. This figure is very close for the first time to the prices of Italian olive oil (8.79 euros per litre), the most expensive in the world. It is not an isolated phenomenon. As the graph shows, the rise in prices affects several producing countries in the Mediterranean: Spain – the most important oil producer in the world – Italy, Greece and Tunisia.
“We are facing historical records because of inflation and, above all, climate change. Drought and extreme temperatures are causing losses in the last harvests. Olive production is falling year after year and prices also reflect the bad prospects”, warns Jordi Pasqual, national head of the oil sector of the Union of Farmers.
According to the calculations of the farmers’ union, the Catalan harvest was already reduced by 50% last year, to 15,000 tons of oil. This year the outlook is worse. The Union of Farmers predicts that the harvest will fall again by an average of 50% throughout the territory. So, it foresees an oil production of around 7,000 tonnes, when the usual in Catalonia is to reach 30,000.
In some territories, such as Les Garrigues and Priorat, farmers warn that they will lose almost the entire harvest, which begins at the end of October. “Even if it rains over the next few weeks, the damage has already been done, because the flowering of many trees has stopped prematurely”, laments Enric Dalmau, president of the DOP Les Garrigues.
The price increase affects all categories of oil: extra virgin, virgin and lampant. In fact, in recent months, Spain has become the country with the most expensive lighting oil (the worst quality). According to data from the Ministry of Agriculture, the latter stood at 6.73 euros per litre, compared to 6.15 euros in Tunisia and 5.81 euros in Italy. Pasqual points out that the increase is motivated by a matter of supply and demand: since the highest quality olive oil is more expensive, the market demands cheaper oil and the price rises.
Farmers warn of the seriousness of the situation. The future of the sector – made up of 27,500 farms in Catalonia – is in danger, as it depends directly on the evolution of the climate.
Faced with this situation, which is unlikely to improve, the sector is claiming aid from the central government and the Generalitat. So far, without much success. Joan Gòdia, director of Food Industries of the Generalitat, explains that a meeting will be held with those affected in September. Gòdia recalls that the Generalitat is currently processing subsidies for the effects of last year’s drought. They will be granted to different cooperatives of olive oil producers for a value of around 200,000 euros.
Regarding the collection of the insurances, the Union of Farmers regrets the difficulties in obtaining them. “The conditions established by Agroseguro are very strict. For example, you have to lose at least 50% of the harvest for the technicians to come and analyze the land”, laments Pasqual.
Beyond insurance and subsidies, which serve to alleviate the current situation, Gòdia points out that the sector must seek solutions to guarantee its future. The planting of trees that are better adapted to the climate seems to be the best option given the difficulties that arise in increasing the amounts of irrigation.
