A disease that affects olive trees and has devastated a key producing region in southern Italy is threatening to cause billions of euros in damage to producers across Europe, according to a new study.
Xylella fastidiosa, a bacterial disease transmitted by insects, has killed millions of olive trees since 2013, prompting many producers to abandon their operations. An epidemic in Puglia at the foot of Italy, a region which produces around half of the country’s olive oil, disrupted the market last year, fueling price volatility.
In recent years, xylella has also been discovered in France, Portugal and Spain – the world’s leading producer of olives, with around 2.7 million hectares of olive trees, or 55% of the cultivated area of the country.
“The European supply of olives could be considerably reduced. . .[resulting]higher production costs for olive oil, “said Kevin Schneider, agricultural economist at the University of Wageningen in the Netherlands and lead author of the paper. In 2017, the value of olive production in Europe was around 2.4 billion euros, with olive oil production estimated at around 6.7 billion euros.
The losses of the Spanish olive industry could reach 17 billion euros over the next 50 years if it follows the same course as the region of Puglia in Italy, where producers and scientists have failed to stop the spread of bacterial disease, according to the study. Total losses in Italy could reach 5 billion euros over the same period, while Greece could be affected by 2 billion euros in losses.
Italy, Greece and Spain account for around 95 percent of olive oil production in Europe and 60 percent of the world total. The researchers noted that any attack on the availability of the product called “liquid gold” would affect producers as well as consumers.
Olive oil prices in Italy have dropped this year due to a bumper olive harvest in the last season, but prices have been unusually difficult to predict in recent years due to the combination of disease, adverse weather conditions and pests.
“Over the past eight years, we have seen four supply shocks from major producers, which has caused huge price volatility,” said Vito Martielli, Utrecht-based analyst at Rabobank.
In early 2019, olive growers from all over Italy took to the streets of Rome to demand state aid after illness and bad weather led to a sharp drop in production.
“What happened in Puglia is completely devastating,” said Schneider. The problem with olive growing was that it was not an annual crop and that trees took several years to bear fruit, he added.
If the bacteria were to spread entirely across the EU, it could affect more than 70% of the region’s production value of olive trees over 30 years old and 35% of young trees, according to a separate study by EU researchers.
They estimated that a full spread of xylella across the EU, affecting fruit and nut trees as well as olives, could cost more than 5.5 billion euros per year due to the loss of production.