Spain is to hold back 12% of its olive oil production until the end of September 2027 after expectations of a bumper harvest sent prices lower and raised concerns about farmers’ profitability.
The agriculture ministry ordered producers on Friday to store the supply on their farms or in third-party facilities. The measure is expected to keep about 188,000 tonnes off the market.
Spain’s olive oil output is forecast to rise by 23% this season to 1.6 million tonnes, which would make it the country’s fourth-largest harvest on record. The current season began in September, following favourable spring weather that helped reverse several years of drought and extreme heat.
The ministry said the intervention would protect both producers and buyers, while bringing “greater stability to the market”. European Union rules allow olive oil to be held back unless the action causes excessive market distortion.
Prices have already fallen as traders anticipate increased availability. At mills in Andalusia, they averaged 2.93 euros per kilogram last weekend, about 15% lower than roughly two months earlier.
However, the olive oil industry has criticised the decision, arguing that the market is global while the order applies only to Spanish producers.
Kyle Holland, a senior analyst at commodity data firm Expana, also warned that storing olive oil could affect its quality. After several months, he said, it could “very quickly” cease to be extra virgin olive oil.
Holland said major buyers already held substantial supplies, meaning the measure might have little immediate effect on prices. The move comes as Spain prepares to manage a sharp increase in production after recent harvests were constrained by difficult weather conditions.
