Spain orders olive oil mills to store 12 per cent of output until September 2027

The ministry said the aim is to "regulate supply, in order to improve and stabilise the functioning of the market and the sector". For shoppers, the order means less oil on sale at a moment when supermarket prices were already coming down. Spain's competition authority has warned the measure could hurt competition and consumers, particularly if restricting supply limits further price reductions.

The 12 per cent order

The obligation applies to each mill's cumulative monthly production, whatever the category of oil, and it starts with November output. October, the first month of the marketing year, is excluded. Each mill chooses which type of oil it holds back and whether the oil sits on its own premises or at third-party facilities.

Mills must report monthly production and closing stocks through Simo. That is the ministry's olive oil market information system.

A group coordinated by the Ministry of Agriculture will monitor compliance, and operators must supply documentation and allow on-site inspections. The instrument dates from 2021. Planas said it had never been applied before.

Why the trigger fired

Spain's harvest is forecast at 1,602,596 tonnes for 2026-27, 23 per cent more than the previous season and the fourth-highest on record. Opening stocks stood at 357,040 tonnes, 23.3 per cent higher than a year earlier, according to Simo data the ministry published on 28 October. Add the two and the total reaches 120 per cent of average production over the previous six marketing years, the threshold written into the mechanism. Mild temperatures and abundant spring rainfall created favourable conditions for the crop.

Farmers, shoppers and the competition watchdog

ASAJA, COAG, UPA and Cooperativas Agro-alimentarias had asked the ministry to take up to 20 per cent of production off the market, more than the 12 per cent ordered. COAG had lobbied for the mechanism for a decade. It called the activation historic. "It will prevent extreme situations such as seeing olive oil priced at nine euros in the supermarket or olive growers having to sell below cost," said Francisco Elvira, head of COAG's olive sector.

Planas visited an olive oil cooperative in Andalusia on 6 November. He said the traditional olive grove was "vital" to Spain and carried high production costs. "If prices fall below a certain threshold, there can indeed be problems with profitability," he told reporters.

From record prices to a glut

Extra virgin olive oil in Spain traded at about 3.9 euros per kilogram in July, European Commission weekly data cited by CNBC showed. In January 2024 the record was 9.3 euros. Deoleo, the world's largest olive oil company, said the market cycle of 2022 to 2024 was "definitively behind us".

The Straits Times reported that drought and heat cut production in 2022-23 and 2023-24.

The Olive Press reported on 26 October that own-brand olive oil averaged around €7.99 a bottle last September. Some had since fallen by around €3, it said, citing Diario SUR.

Farmers said producer prices were falling faster than shelf prices.

What happens next

The withdrawal runs from November production to 30 September 2027. The ministry can amend the resolution from 31 December 2026 depending on how production develops.