Explained: How Spain’s drought is causing an olive oil shortage in the world

A drought in Spain is threatening the world’s olive oil supply and spiking prices around the world.Spain, the largest producer of olive oil in the world, has been experiencing a severe drought since last summer.Olive oil prices have already shot up by 60 per cent since June.Let’s take a closer look:Spain’s agricultural heartlands are experiencing extreme drought.According to Fortune, Spain witnessed its second-driest March this century and April is on track to be its driest ever.As per Earth.org, April saw “not a single drop” of rain fall across more than half of the country in its first 17 days.Last year was Spain’s sixth driest — and the hottest since records began in 1961.At the moment, 27 per cent of its land has been classified as under a ‘drought emergency’ or ‘alert’.While water reserves are at 50 per cent nationally, things are way worse in Andalusia – the country’s most important region.The Guadalquivir river basin is at 24.8 per cent of its capacity, and farmers in the region have had their water allowance for irrigation cut by up to 90 per cent in some instances.Olive oil production hurtSpain usually supplies about 40 per cent of the world’s olive oil output.But Spanish exporters expect a 10 per cent drop in global olive oil supplies this year compared to production in 2021, according to Reuters.Spanish exporters’ association Asoliva told Reuters the figure was 3.1 million tonnes in 2021.Heatwaves when the olive trees were flowering last spring and a severe drought since last summer in Spain and in number two and four producers Italy and Portugal have also shrunk stocks.[caption id="attachment_12510252" align="alignnone" width="640"]

View of the Sau reservoir, about 100 kilometres north of Barcelona. AP[/caption]“If it does not rain very soon, we are going to have a poor crop again,” Kyle Holland, a vegetable oils analyst at commodity tracker Mintec, told the Financial Times.“Every day that goes by without rain, the forecasts get worse,” Dcoop, Spain’s largest olive oil producers’ cooperative, told Reuters.And worse is expected.Spain's state weather agency has predicted temperatures will rise across the Mediterranean nation towards the end of the week, and will peak closer to the July average than those expected for late April.Manuel Heredia Halcón, who has an olive oil farm in Andalusia told CNN that producers are very worried.

"You cannot replace the olive tree with any other tree or product," Halcón said.

Some farmers say they will simply not sow seeds at all for some crops this year, knowing the plants will simply shrivel in the fields.Eduardo Vera Canuto, a rice farmer in Isla Mayor, in southern Seville province, called the situation “alarming.”“We are not going to be able to sow rice. We have had five seasons, and this would be the sixth, with many difficulties. Last year we only sowed 30% of the land, because of the water we are entitled to," he said.“It’s a catastrophe,” said Primitivo Fernandez, head of Spain’s National Association of Edible Oil Bottlers, as he highlighted the conjunction of drought, economic crisis and the war in Ukraine.Shoppers as a result can expect high prices – and not just of olive oil.According to Bloomberg’s ‘Pizza Margherita Index”, the cost of homemade pizza increased 22.5 per cent compared to last year.Meanwhile, the price of making paella increased 18.5 per cent since last year.Spain initially saw a price hike triggered by a scarcity of sunflower oil last year after Russia invaded Ukraine.But soaring inflation, costlier fertilisers and the drought continue to push prices upwards.A litre of virgin olive oil is sold in Spain for over 7 euros, when in February 2022 the price was below 5 euros.The price hikes have reduced sales volumes of olive oil in Spain by 8 per cent in the year to February, according to a study by consulting firm Nielsen.

Prime Minister Pedro Sanchez has already sounded the alarm on this, as per Earth.org.

“The government of Spain and I are aware that the debate surrounding drought is going to be one of the central political and territorial debates of our country over the coming years,” he said.He added that investments to “help recover our rivers, improve our water purification and cleaning systems and the reuse of water, and digitalise our water management” were one of his government’s priorities.With inputs from agenciesRead all the Latest News, Trending News, Cricket News, Bollywood News, India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.