A drought in Spain that has cut olive oil yields by 62% is set to push global prices up this year, prompting industry representatives to warn of a looming production “crisis”.

According to the International Olive Oil Council, Spanish olive oil production in the first four months of the 2012/13 season, was down 62% on the prior season at 543,600 tonnes.

While there are still some months to go until the end of the crop year, the agency said it looks likely that Spanish production will fall short of the tonnage forecast in November of 820,000 tonnes. In the previous three seasons, output averaged 1.47m tonnes per season.

“Being as it is the world’s leading producer of olive oil, Spain’s performance has a significant impact on international production levels.”

Spain produces around 50% of the world’s olive crop and so the drop in production will inevitably be felt by importers across the globe, the associated warned.

“Producer prices on the Spanish marketplace have experienced a reasonable, logical increase. Olive Oil Agency surveys have in fact revealed that they have been excessively low in recent seasons and have not managed to cover production costs,” the agency said.

According to the latest food consumption figures released by the Spanish agriculture ministry, in the current crisis setting, olive oil consumption by Spanish households dropped 14% in the last four months of 2012 while consumer prices rose by an average 10%.