Spain has ordered olive oil producers to withdraw 12 percent of their total output from the market to be stored until September 2027, a move intended to prevent a projected bumper harvest from collapsing prices. According to a statement from the agriculture ministry on Friday, the mandate will remove approximately 188,000 tonnes of olive oil from the market.
The Spanish government stated the intervention aims to regulate supply to improve and stabilise the functioning of the market and the broader sector. This decision comes as Spain prepares for what is expected to be its fourth-largest harvest on record, driven by mild temperatures and abundant spring rainfall. The agriculture ministry forecasts production of 1.6 million tonnes for the 2026-27 season, representing a 23 percent increase over the previous year.
The 12 percent requirement will apply to the cumulative monthly production of each mill, regardless of the specific category of olive oil produced. Producers have been granted the flexibility to choose which type of oil to store and whether to utilize their own storage facilities or external ones, the ministry noted.
Addressing Economic Risks in Olive Oil Production
During a visit to an olive oil cooperative in Andalusia, Spain’s primary production region, Agriculture Minister Luis Planas addressed the necessity of the measure. He noted that the traditional olive grove remains “vital” to the nation, but warned of the economic risks posed by surplus supply.
“It has high production costs, and if prices fall below a certain threshold, there can indeed be problems with profitability,” Planas told reporters. He added that this specific regulatory measure has never been applied previously.
The intervention follows a period of low production. During the 2022-23 and 2023-24 seasons, drought and heatwaves caused olive oil prices to soar to record levels. That price surge had a direct impact on consumers, prompting many Spanish households to substitute olive oil with more affordable alternatives like sunflower oil.
The government indicated that the storage mandate could be modified starting December 31, depending on how production levels develop throughout the season. The measure follows lobbying from farming associations seeking to protect the sector from the impact of the upcoming surplus.
Spain currently accounts for approximately 40 percent of global olive oil output, according to data from the International Olive Council.
