Spain forecasts a recovery in olive oil production that is weighing on prices

The 2026 Sectoral Report on Olive Oil, produced by AgroBank and Agrifood Comunicación, forecasts that Spain will reach a production of 1,602,596 tonnes in the 2026/27 campaign, according to the estimate published on 1 October by the Ministry of Agriculture, Fisheries and Food. This represents an increase of 23% on last campaign and 35% on the average of the last six.

It will be one of the largest harvests on record, well ahead of the scarce output of the 2022/23 and 2023/24 campaigns, which drove olive oil prices at origin and for consumers to all-time highs.

The report can be downloaded at the following link: www.agrobankhub.es/actualidad/informes-sectoriales.html

Spain closed the 2025/26 campaign on 30 September with 1,301,979 tonnes, 8% less than the previous one. Even so, this figure keeps the country as the undisputed leader of the world market: it accounts for 64% of European Union production and 38% of world production, which is estimated at around 3.4 million tonnes.

In terms of area, Spain also accounts for 2.75 million of the world’s 11.7 million hectares of olive groves, well ahead of Tunisia (1.8 million) and Italy (1.1 million). The crop now extends to 60 countries across five continents, with new producers such as El Salvador, Ethiopia, Kuwait and Uzbekistan.

Andalusia drives the harvest

As always, the bulk of the coming campaign falls to Andalusia, with a forecast of 1,261,200 tonnes, 38% above the average of the last six campaigns. The storms that hit the region last winter had less impact on olive production than expected. The report warns, however, that this autumn’s weather, which is typically changeable, could slightly reduce the estimate, something that will become clear before the end of the year.

Prices: from all-time highs to normalisation

Greater availability of oil has fed through to prices. In week 41 of 2026, extra virgin olive oil (EVOO) was trading in Spain at €331.86/100 kg, 22% less than in the same week of 2025 and 4.37% below four weeks earlier, while virgin olive oil stood at €306.99/100 kg. The correction is even sharper in Italy, where EVOO was trading at €437/100 kg, 53% less than a year earlier, although still at a much higher price than in Spain.

Across all categories except olive pomace oil, Spanish prices are 14.5% below those of last campaign. The fall reaches 54.4% if the comparison is made with week 41 of 2024, when prices still reflected the scarcity of previous campaigns and were extraordinarily high (an average of €688.74/100 kg). This is therefore not a comparison with the average of the last two campaigns, but with a specific peak.

Nonetheless, the report stresses that current levels are not low in historical terms: although far from those recorded in recent years, they are above those of the campaigns before 2021.

The key question is their effect on margins. With production costs having risen in recent years, farms generally remain profitable, although with lower margins than in previous campaigns.

The situation is more delicate for traditional rain-fed olive groves, which are low-yielding and on sloping land. They have been suffering a significant loss of profitability, with a risk of abandonment in some districts. The report argues that the new coupled support under the 2023-27 CAP for olive groves with fewer than 100 trees per hectare or slopes of more than 25% should be targeted primarily at them.

Across the EU, stocks at the end of the 2025/26 campaign will be around 476,000 tonnes, 28% more than a year earlier, which also partly explains the downward trend in prices. Even so, they remain below the average of the last five campaigns and far from the large carry-over volumes of 2019 (784,000 tonnes).

Solid exports, but in bulk

Spanish exports totalled 911,300 tonnes as at 31 August, 3.7% less than in the previous campaign but 10.2% above the average of the previous four (827,200 tonnes). Their value, closely linked to price fluctuations, may exceed €6 billion, with coverage ratios above 800%. Italy is the leading destination, with more than €1 billion, followed by the United States, France, Portugal, the United Kingdom, China, Japan, Australia, Germany and Brazil.

According to the report, the main weakness in the sector’s turnover is that more than 60% of foreign sales are still made in bulk. In many cases they go to countries such as Italy, which bottle the oil and re-export it under their own brands, capturing the added value.

Lower prices are also reflected in the EU trade balance, which fell from a record €4,389 million in 2023/24 to €2,846 million between October 2025 and July 2026.

Demand is growing beyond the Mediterranean

World consumption has stabilised since 2019 at around 3 million tonnes, but its distribution has changed: non-EU countries now consume 1.64 million tonnes, compared with 1.45 million in the Member States.

Traditional markets still account for around 70% of consumption, and new non-producing consuming countries for the remaining 30%. In Mediterranean countries, more than 90% of oil is sold through large retail chains, where private labels account for 60% to 70% of sales. The gourmet channel and direct sales, with a share of less than 5%, offer higher margins and have encouraged the emergence of new brands from small mills.

A social crop that is modernising

In Spain, olive growing is an eminently social crop, with more than 350,000 owners, and 69% of its area (1.9 million hectares) is rain-fed.

At the same time, irrigation and intensive and hedgerow plantations are advancing. Andalusia already has close to 100,000 hectares of super-intensive olive groves, with yields that can exceed 10,000-12,000 kg of olives per hectare and a harvesting cost of just €0.03-0.04/kg thanks to mechanisation; water availability is their main limiting factor. The industry is completed by 1,861 olive mills, 1,705 bottling plants, 67 pomace extraction plants and 22 refineries.

Keys to the future

In conclusion, the report notes that Spain remains by far the undisputed leader of the world olive oil market. The recovery in production has normalised supply, causing a price correction from the all-time highs reached in 2023 and 2024.

Future growth in demand is expected to come mainly from non-Mediterranean consumer markets, as is already the case today.

The report identifies the profitability of rain-fed olive groves as the greatest challenge, which will require greater differentiation in CAP support. For these traditional groves, the greatest long-term threat will come from the effects of climate change and lack of rainfall.

In response, the olive oil sector’s main strategic opportunity lies in generating more added value through innovation, differentiation and the marketing of bottled and branded products, winning new markets.