Spain, the world’s top olive oil producer, has taken an unprecedented step to stabilize the market amid a record harvest. On Friday, the country’s agriculture ministry ordered farmers to withhold 12% of their production until the end of September 2027. This move aims to support farmers’ profitability and protect buyers, according to the ministry. The measure is allowed by the European Union, provided it does not cause excessive market distortion.
The current olive harvest season, which began in September, is expected to yield 1.6 million tons, a 23% increase from last year. The government plans to keep 188,000 tons off the market. However, the anticipation of more supply has already driven prices down. In Andalusia, prices averaged 2.93 euros per kilogram last weekend, a 15% drop in about two months.
The olive oil industry has criticized the government’s intervention, arguing that the global market cannot be controlled by a policy affecting only Spanish producers. Kyle Holland, a senior analyst at commodity data firm Expana, noted that storing olive oil for months could degrade its quality, making it no longer extra virgin. He also suggested that major buyers already have sufficient supplies, so the storage order may have little immediate impact on prices.
Spain is not alone in facing commodity market volatility. Canada’s maple syrup reserve is expected to be empty by February, while Japan has shifted from a rice shortage to a record surplus. China, meanwhile, has been managing pork price fluctuations by adjusting its strategic reserve.