Spain to take surplus olive oil off the market to ensure prices stay high

Spain's Ministry of Agriculture, Fisheries, and Food (MAPA) has for the first time issued a mandatory withdrawal of olive oil from the market if the forecasts for a very good harvest for 2025-2026 are met, in a bid to prevent a fall in prices.

This order will allow for the mandatory and temporary withdrawal of a percentage of oil from the market, a measure that has not been implemented in Spain until now.

The new rule will be based Article 167a of European Regulation 1308/2013 of the Common Market Organisation (CMO) for agricultural products, which allows Member States to establish marketing standards for products such as olive oil, sales of which have soared this year.

The Ministry has opened a public consultation until July 2nd prior to drafting the order that will activate the withdrawal.

The plan is being supported by the main agricultural organisations (Asaja, COAG, UPA, and UDU) and Agro-Food Cooperatives.

Spain's olive oil sector experienced an extraordinary situation over the past two years, with skyrocketing prices on the shelves at some times and prices at source at historic lows at others.

Production shortages in the 2022/23 (666,000 tonnes) and 2023/24 (854,500 tonnes) also pushed the price of extra virgin olive oil at the source to €9 per kilo.

Now that production has recovered to 1.4 million tonnes, the price at source has dropped to just €3.59 per kilo.

Rafael Sánchez de Puerta, the general director of Dcoop, an agricultural olive oil corporative, is convinced that this measure will benefit producers.

"Until now, we haven't needed to, but with a good harvest expected, we saw the need to activate it, as simply as possible, to avoid a price collapse. We are willing to make a sacrifice, because it's much better than doing nothing and letting prices collapse," he explained.

The Spanish Agricultural Union’s general secretary, Cristóbal Cano, agreed saying that " speculation is now rampant" and there should be "a different price scenario, according to the law of supply and demand," because "70 percent of the oil produced this season has already been sold," and the forecasts for the next season are projected to be low.

For this reason, he urges the implementation of Article 167 "to see how it works and what impact it has on the market”.

While the agricultural cooperatives support the move, what impact will it have on general consumers? It's certainly alarming at first for the average consumer in Spain to hear that the government wants to keep the price of a staple product higher than it could be when living costs have increased so much in recent years.

Since post-pandemic times ,the price of olive oil in Spain has been sky high for Spaniards, who use this essential ingredient in almost every dish. It got worse during Spain's drought with far lower yields being produced than normal.

In fact, in 2023 it was even cheaper to buy olive oil abroad than it was to get it here in Spain.

Extra virgin olive oil cost around €9 per litre in January 2024, but by the second half of the year it had dropped significantly. By this time and the start of 2025, it was down to €4.20.

This year price of extra virgin olive oil has seen a significant drop, down 50 percent compared to the same period last year. According to the Ministry of Agriculture, the average price of the oil has dropped by more than 40 percent since October of last year. The price then dropped further by April to €3.74 per litre and it hasn’t moved much since.

This means that the prices should stay at a similar cost when the plan is implemented, it will just stop them falling any further.

Since last July, Prime Minister Pedro Sánchez's government included olive oil in the list of 'basic necessities' which are exempt from the tax.