Spain has decided to temporarily withdraw 12% of its olive oil production from the market to combat falling prices. The provision concerns approximately 188 thousand tonnes of product, which will have to be conserved until 30 September 2027. In this way the Spanish government aims to limit the supply available during an olive oil campaign characterized by abundant harvests and high stocks. The decision could also have consequences on the Italian market, where the prices of extra virgin olive oil have recorded sharp declines in the last year.
Why Spain withdraws 188 thousand tons of olive oil
The Spanish Ministry of Agriculture forecasts a production of 1.6 million tonnes of olive oil for the 2026-2027 campaign, up 23% compared to the previous year. The mild temperatures and abundant spring rains favored the development of the olive trees. If the estimates are confirmed, the current harvest will be the fourth largest in the country’s history. Added to these quantities are 357,040 tonnes of stocks, 23.3% higher than those of the previous year.
The government has therefore established that each oil mill must set aside 12% of the oil produced starting from November 2026, without including the quantities declared in October. The product may be stored at the producers’ plants or in external structures, but cannot be marketed before September 30, 2027. The measure may be modified from December 31, 2026, based on the actual production trend.
The recovery of Spanish production is also influencing the prices of Italian oil. According to the findings of Areté, a company specialized in the analysis of agri-food markets, the price of Italian extra virgin olive oil has decreased by 47% in the last year. Prices, which in November 2025 reached around 9.20 euros per kilogram, fell between 4 and 4.20 euros, with some reports of prices around 3.80 euros.
The decline is mainly linked to the greater availability of the product after two years marked by drought, which had caused strong increases. The Spanish decision to temporarily reduce supply could help support prices at source in Italy too, but the effects will depend on the trend in demand and harvests.
Italian olive growers in difficulty, demanding higher prices
The drop in prices worries Italian agricultural organizations. On 12 October around two thousand olive growers took part in a demonstration in Bari to denounce the economic difficulties of the sector. According to Tommaso Loiodice, president of Unapol, current prices do not allow many companies to adequately cover production costs.
The organization believes a price of at least 7 euros per kilogram is necessary, also considering the energy and management costs of the olive groves. Unapol also asked for interventions on subsidized imports of oil from non-European countries, in particular from Tunisia, and greater application of the rules against unfair commercial practices. Among the risks reported by the association is also the possibility that some farmers give up the olive harvest because it is not economically convenient.
What changes for oil prices at the supermarket
The reduction in Spanish supply could slow the decline in olive oil prices on the European market. However, it does not mean that the cost of bottles in Italian supermarkets will automatically increase. The final price also depends on distribution stocks, commercial contracts, packaging and transport costs and promotions applied by the chains.
Furthermore, the prices at origin refer to the product sold by the producers and do not coincide with the prices per liter paid by consumers. Spain’s decision therefore affects mainly the wholesale market, while any changes in retail prices could appear in the following months.
