Spain holds back olive oil as bumper harvest floods market

Spain orders farmers to hold back olive oil

On Friday, Spain's agriculture ministry ordered farmers to withhold 12% of their production until the end of September 2027, storing supplies on farms or at third-party facilities.

Record harvest threatens to crash prices

The current harvest season began in September. Favorable spring weather promises to reverse years of drought, with Spanish olive oil production projected to jump 23% to 1.6 million tons.

Prices already falling despite the order

Olive oil prices at mills in Andalusia averaged two point ninety-three euros per kilogram last weekend, down about 15% in about two months, as expectations for more supply hit the market.

The government's goal: stability for all

Spain's agriculture ministry said the measure aims to ensure farmers' profitability and protect olive oil buyers while bringing greater stability to the market for producers and consumers.

“The measure aims to ensure farmers' profitability and also to protect the interests of olive oil buyers.”

Industry warns stored oil degrades quickly

Kyle Holland, senior analyst at commodity data firm Expana, noted that olive oil degrades over time. After several months in storage, that olive oil is not going to be extra virgin anymore.

“after several months in storage "very quickly that olive oil is not going to be extra virgin anymore."”

Global market limits Spain's power alone

The olive oil industry pushed back against the order, pointing out the market is global while the order only applies to Spanish producers. Top buyers already have hefty supplies on hand.