Andalusia Forecasts a 12.5% Smaller Olive Oil Crop

Andalusia expects to make about 1,022,000 tons of olive oil this season, 12.5 percent less than last year, according to the official crop estimate the regional agriculture minister, Clara Aguilera, presented in Jaén today. That is still above the average of the last four harvests, and it comes after Spain sold more oil last season than it is now expected to produce. Here are the numbers, the reason for the drop, and what a smaller crop could mean for prices that have been painfully low.

What the forecast says

Every October the Junta de Andalucía publishes its “aforo”, the first official estimate of the olive crop, and the trade waits for it more than for any other number of the autumn. This year’s figure, reported by Óleo Revista, puts the region at around 1,022,000 tons of oil, down 12.5 percent. Aguilera stressed that it is still a good crop, about 4 percent above the average of the previous four seasons.

The fall is sharpest in Córdoba and Málaga, and the reason is not weather but the olive tree’s habit of alternate bearing: a heavy crop one year is often followed by a lighter one. The effect is strongest in Hojiblanca, the dominant variety in both provinces. Jaén, which on its own makes half of Andalusia’s oil, is expected to be close to its recent average.

The cooperatives had already published their own estimate last week. Cooperativas Agro-alimentarias expects Spain as a whole to produce about 1,261,000 tons, 9.7 percent less than last season, and it points out that Spain’s total sales at home and abroad in 2009/10 were around 1,325,000 tons, more than the new crop. Earlier, at the opening of a tasters’ course in Jaén at the end of September, the International Olive Council’s executive director, Mohammed Ouhmad Sbitri, had put Spain at about 1.4 million tons, with at least 200,000 tons of old oil still sitting in the mills.

Why the trade cares

Last season Spain sold a record amount of oil at prices growers said were below their costs, as we reported in our note on Spain’s record sales. A smaller crop is the first thing in two years that could change that arithmetic. If sales hold at last year’s pace and production falls, stocks shrink and buyers lose some of their bargaining power.

• Spanish exports between November 2009 and August 2010 were around 650,000 tons, about 20 percent more than a year earlier, and Andalusia supplies 70 percent of them.
• Italy takes about 60 percent of the oil Andalusia sends abroad.
• The IOC estimates Spanish consumption at around 560,000 tons, and says it is holding steady despite the economic crisis.

The picture outside Spain is mixed. Sbitri’s figures had Greece up 5 percent to 336,000 tons, Syria up 29 percent and Turkey up 9 percent, with Tunisia the one major producer expected to fall, by 20 percent. That is a lot of oil still looking for buyers, which is why nobody in Jaén is celebrating yet. For comparison, our report on the IOC’s view of the 2009/10 crop shows how quickly these forecasts get revised once the mills start running.

Table olives

The same estimate puts Andalusia’s table olive crop at about 343,000 tons, 7.5 percent less than last year and 12.5 percent below the four-year average. Seville alone accounts for 264,400 tons, or 77 percent of the total.

Sources

• Óleo Revista, “La Junta de Andalucía estima un descenso de la producción de aceite de oliva esta campaña del 12,5%” (October 21, 2010)
• Óleo Revista, “Cooperativas Agro-alimentarias estima una producción de 1.261.000 toneladas de aceite de oliva” (October 13, 2010)
• Olive Oil Times, “Olive Council Predicts Increased Olive Oil Production for 2010-11” (October 11, 2010)