Why Spain is taking 188,000 tonnes of olive oil off the market
The world’s biggest olive oil producer is holding back 12% of its output from November to stop producer prices falling further. It’s the first time Spain has used the measure, which is expected to keep about 188,000 tonnes off the market until the end of September 2027.
Spain has mandated that olive oil mills store 12% of their production from November 2026 to control supply and stabilize prices. This measure, published in Spain’s Official State Gazette, applies to each mill's monthly output and allows mills to store the oil at their own facilities or at a third-party site. The stored oil must remain off the market until September 30, 2027, marking the end of the season.
The decision comes as Spain anticipates a robust harvest and already possesses high stocks, with opening stocks at 357,040 tonnes and forecasted production reaching 1,602,596 tonnes.
The anticipated supply may lead to a further drop in producer prices. Spanish producers received around €3 per kilo for extra virgin olive oil in early November, a decrease from approximately €4 per kilo a year ago, according to El País. The government can impose this measure when opening stocks and forecasted output are at least 20% higher than the average of the previous six seasons.
This season's figures met this criterion, resulting in the expected removal of 188,000 tonnes of oil from the market. Spain is the world's largest olive oil producer and exporter, accounting for about 45% of global production and 70% of EU production. Olive oil prices soared after drought and heatwaves affected harvests in recent years, but fell as production recovered.
The government’s decision aligns with a significant deal in the sector, where Spanish companies Dcoop and Acesur agreed to acquire Deoleo Holding, a Deoleo subsidiary. Deoleo, described as the world's largest branded olive oil company, owns brands including Carbonell and Hojiblanca. The deal values Deoleo Holding at €520 million, including debt, and seeks to acquire 100% of the company if remaining shareholders join the sale.
Deoleo shares dropped 21.1% after the announcement, following months of negotiations and a rival bid from Spain’s Migasa and Italy’s Coricelli.
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