Spain’s Heatflation Will Burn Through European Wallets
In Europe, nothing screams climate crisis like an extreme heat alert in the spring. Temperatures in the southern tip of Spain reached 38.7C on Thursday, provisionally breaking the record for the hottest day ever set in April. As a point of comparison, the average temperature in that month was 14.2C between 1991 and 2020 for Andalucia, where the record was set. The country is on alert as temperatures remain high, humidity is low and winds strong: perfect wildfire conditions. Even if temperatures start to cool, there wont be much relief for Spains parched crops and struggling farmers. Its all just part of a long period of weather-related stress for the nation, which has experienced higher-than-usual heat and low rainfall over the past three years and officially entered a state of long-term drought at the end of 2022. In mid-April, the Coordinator of Farmers and Ranchers Organizations (COAG), Spains main agricultural association, released a report warning that the dry period is causing irreversible losses to more than 3.5 million hectares of crops. The report makes for apocalyptic reading: Water reserves are extremely low and crops in some regions will be completely lost unless it starts raining. In Murcia, sometimes described as the vegetable garden of Europe, the drought is destroying cereal crops and livestock has been abandoned. Farmers in Andalucia have decided to stop planting industrial tomatoes and other vegetables, with winter crops such as garlic and onions at risk. That is all of grave concern: Spain produced about 25% of the European Unions fresh vegetables in 2021. Thus we have heatflation: food prices increasing as extreme temperatures and drought result in smaller harvests and devastate livestock. A 2021 report from the European Central Bank found that hot summers had the largest and longest-standing impact on inflation, notably food. Researchers also found that theres a non-linear impact of global warming on prices, with the impact more significant for larger shocks and for higher absolute temperatures. As the impact of climate change gets worse, so will the effect on our wallets. Were already feeling the consequences of heatflation. Spain grows 63% of the olives that wind up in cooking oil in the EU. Consumer prices have already surged by 27% over the last year. With olive trees suffering from prolonged heat stress, theres a strong possibility that supplies will be hit even harder this year. Prices arent coming down any time soon. Conditions are likely to get worse in the medium-term. Scientists are predicting the arrival of El Nino, a naturally-occuring meteorological event that brings a rise in global temperatures. The latest National Oceanic and Atmostpheric Administration (NOAA) forecast puts the probability at 62% that an El Nino will develop between May and July. The chances of an El Nino by the fall are at more than 80%. All this suggests that heatflation is here to stay. Even if conditions do improve in Spain, the realities of climate change mean that pressures on global food supply are only going to intensify and become more frequent. The situation is urgent: We rapidly need to find climate-resilient ways of growing food and protecting the water required to cultivate our farms. More From Bloomberg Opinion: Mosquitoes Are Poised to Swamp Our Health Systems: Lara Williams How Much Extra Would You Pay to Save the Planet?: Chris Bryant Planning to Power Your Car With Cooking Oil? Fat Chance: David Fickling This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. Lara Williams is a Bloomberg Opinion columnist covering climate change. More stories like this are available on bloomberg.com/opinion 2023 Bloomberg L.P.