Spanish olive oil output rises on last year

Spanish olive oil output has risen from last year despite farmers' reports of storm damage in the world's biggest producer, but looks like missing bottlers' forecasts of a bumper harvest, official data showed on Thursday.

The Agriculture Ministry estimated that by the end of February, farmers had produced 1.083 million tonnes, compared to 1.03 million in the prior 2008/09 campaign.

The olive harvest begins on Nov. 1 and most of the crop is usually in by the end of February. Olive oil has been an essential part of the Mediterranean diet for thousands of years and olive trees throng many hillsides in southern Spain, which are often unsuitable for growing other crops.

Influential farmers' group Asaja recently said that 40 percent of the olive crop has been lost in southerly Jaen province, which alone produces more oil than any other country bar Spain itself and Italy.

February this year was the wettest in 30 years in Spain and heavy rains caused severe flooding as many rivers burst their banks in southern Spain. Spain's Grupo SOS, the world's biggest olive oil bottler, predicted earlier this year that olive oil production would come in at 1.215 million tonnes in the current cycle.

That is unlikely, because in recent years less than 100,000 tonnes have been pressed in the remaining months of the campaign, during March, April and May.

Spain posted record olive oil output of 1.236 million tonnes two years ago, in the 2007/09 season.

Front-month olive oil traded down 0.6 percent on the MFAO futures exchange in Jaen at 1,650 euros a tonne.

Olive oil prices have gradually slipped from a high of 4,300 euros/tonne in January 2005 due to increased world output, and Spanish farmers have been protesting for months that farm-gate prices no longer cover their costs.