Spain has issued an unprecedented order requiring farmers to withhold 12 percent of their annual olive oil production from the market until the end of September 2027 to prevent a price plunge following a bumper harvest. The Spanish agriculture ministry stated the measure aims to ensure farmer profitability and protect buyer interests, bringing stability to the market. The order entered into force immediately as olive oil prices slid lower, with Andalusian mills averaging €2.93 per kilogram, down 15 percent since early September.
The intervention marked a first for modern Spain and came as farmers predicted a record fourth-largest harvest of 1.6 million tonnes, 23 percent higher than last year. However, the measure faced opposition from industry groups and warnings from Spain's competition regulator, the CNMC, who flagged risks to competition and consumers. Analysts cautioned that storing oil for seven to nine months could degrade quality, particularly extra virgin varieties, and that major buyers already have ample supplies, limiting the immediate price impact.
The ministry said the withheld volume would total 188,000 tonnes and would create a technical group to monitor compliance via on-site checks. Meanwhile, in Italy, extra virgin olive oil prices averaged €5.18 per kilogram, down 38 percent year-on-year but rising over 8 percent weekly.
Source: Financial Times Markets · Summarized by HeadlinesBriefing