Spain Orders Mandatory Olive Oil Storage to Stabilize Market and Prices

The Spanish government has intervened in the olive oil market by ordering the mandatory storage of 12 percent of the production declared monthly by olive mills. Published in the Official State Gazette, the measure aims to prevent market distortions, ensure price stability, and protect farmers' profitability amid a significant surge in expected supply.

The regulation, which took effect immediately, requires approximately 188,000 metric tons of olive oil to be temporarily withheld from the market and stored in either internal or external facilities until September 30, 2027. This decision applies to cumulative monthly production starting from November, leaving out the initial month of October.

Official forecasts gathered from regional authorities estimate that national production for the 2026-2027 season will reach 1,602,596 metric tons, marking a 23 percent increase compared to the previous harvest. If confirmed, this yield will represent the fourth highest in historical records. Favorable weather conditions during the previous spring, characterized by mild temperatures and abundant rainfall, supported successful flowering and fruit development.

In addition to the anticipated harvest, initial stock levels at the start of the season stood at 357,040 metric tons, reflecting a 23.3 percent rise from the prior period according to data from the Olive Markets Information System. Combined, the projected production and initial reserves surpass 120 percent of the average production from the preceding six campaigns, satisfying the technical criteria required to activate the mandatory withdrawal mechanism.

The initiative has drawn mixed reactions across the agricultural and industrial sectors. Organizations representing agricultural producers have repeatedly requested this intervention to counteract declining prices and skyrocketing production costs, which have been exacerbated by rising fuel and fertilizer expenses. Meanwhile, industrial groups have expressed differing viewpoints regarding the scale and necessity of the intervention.

According to Nuria Villanueva of Cooperativas Agroalimentarias of Castilla-La Mancha, market pressures are further compounded by external factors such as preferential trade agreements with third countries like Tunisia. Under the EU's Active Improvement Traffic regime, Tunisian olive oil can enter without tariffs if it is re-exported, creating additional market distortions alongside strong domestic output and high stockpiles.

To ensure compliance, the Ministry of Agriculture will establish a technical monitoring group to oversee a control plan executed by regional authorities. Operators must provide necessary documentation and accommodate on-site inspections if requested. Furthermore, the resolution allows for potential modifications to the withdrawal percentage starting December 31, based on the actual evolution of the harvest.