Spain Warns Heat Wave Threatens Olive Oil Production | Food industry

Severe heat waves and a lack of rain in Spain are threatening to cut olive oil production from the world’s top exporter, the country’s agriculture minister has warned.

“If there is no temperature relief or rains in the coming weeks, this year’s olive harvest could be significantly lower than previous ones,” Luis Planas told Bloomberg News. “The olive sector is concerned about oil production.”

Spain accounts for nearly half of the world’s olive oil production. The setback, along with the continued disruption of sunflower oil supplies from Ukraine, meant vegetable oil prices were likely to remain high, Planas said.

Prices for refined olive oil in Jaén, southern Spain, Spain’s benchmark, rose 8.3% in June from the previous crop year to €327 (£274) per 100kg , according to the International Olive Council. In Bari, southern Italy, extra virgin oil costs an average of €419.7 per 100 kg.

Olive oil supplies are under threat as northern Italy suffers its worst drought in 70 years. Market sources suggest that Italian olive oil production could be 20-30% lower than last year. The drought is also expected to lead to lower harvests of apricots, peaches and pears.

Hot weather in large parts of Europe is also threatening to disrupt cereal production, at a time when global food prices are near record highs following the Russian invasion of Ukraine, which sent a spike in skyrockets the price of wheat and other grains.

Planas estimates that Spain’s overall cereal production, including corn, wheat and barley, could fall by 13% this year to 17.5 million tonnes due to high temperatures and scarce rainfall. .

Ukraine and Russia reached a UN-backed deal in late July to allow the export of millions of tonnes of grain from blocked Black Sea ports, which could help lower prices and avert the threat of a catastrophic global food crisis.

The objective of the agreement is to secure the passage of cereals and essential products such as sunflower oil from three Ukrainian ports, including Odessa. Officials hope that if Russia sticks to the deal, pre-war export levels from Ukraine’s three ports – 5 million metric tons a month – could be reached within weeks.

Planas said Spain had received only a handful of Ukrainian grain shipments using alternative routes since the invasion began six months ago.

On Monday, Ukraine made its first shipment of grain since Russia invaded the country in late February.