Why is the Government withdrawing olive oil and what impact does it have on the price paid in supermarkets?

The order from the Ministry of Agriculture for oil mills to withdraw 12% of the olive oil produced during the 2026-2027 campaign, and which affects everything manufactured since last November 1, will lead producers to store around 188,000 tons of 'liquid gold'. This has generated many doubts in the consumer, who fears the impact of this measure on final prices in supermarkets. The decision was published in the Official State Gazette (BOE) this Friday and will be in force throughout this olive grove campaign, which runs until September 30 of next year.

Why does the Government decree this storage?

This is a historic decision. What has changed with respect to previous campaigns and has led the Government to make a move are the harvest forecasts for this year, the so-called 'capacity'. According to the Ministry of Agriculture, the planned production for 2026-2027 is more than 1.60 million tons (for more than 3.4 million in global production). This is 23% more due to the mild temperatures and abundant rainfall last spring, which have favored the flowering and setting of the olives.

The Ministry of Agriculture estimates that we may be facing the fourth best campaign since there are historical records. A context with high availability of oil that affects prices at origin

Added to the good prospects are stocks from the previous campaign, of up to 357,040 tons, which are 23.3% more than those recorded in 2025-2026. In Agriculture they estimate that we may be facing the fourth best campaign since there are historical records. A context with high availability of raw materials - up to 120% more oil than in the average harvest of the last 6 campaigns - which affects prices at origin, that is, the remuneration that farmers receive for their olives.

Why are you interested in not lowering the price at source much?

The withdrawal is a measure that has been requested by the main agricultural organizations (Asaja, COAG, UPA, Union of Agri-Food Unions and Cooperatives), which regret the fall in prices at origin and want to rebalance the market. According to the latest Asaja 'Price Bulletin', corresponding to the first week of November, farmers were paid 3.12 euros/kg for extra virgin oil, while they received 2.81 euros per kilo for virgin oil. Very far from the profitability threshold that sources such as the Spanish Association of Municipalities of Olivo (AEMO), place around 5 euros.

The Government is interested in greater stability in the olive oil market, and in producers receiving remuneration that allows them to maintain their farms. It should be remembered that Spain is the world's leading producer of 'green gold' and last year alone it exported 3,728.17 million euros. The order had been being prepared since last summer, although its application occurred in an electoral context and with the agricultural sector guarding arms, after the Urda tragedy frustrated the large rally called last week in Madrid.

The Government is interested in greater stability in the olive oil market, and for producers to receive remuneration that allows them to maintain their farms.

Has it been applied on other occasions?

It is the first time that a mandatory withdrawal of this nature has been applied in Spain, without financial remuneration for the operators, who are the owners of the oil mills (the facilities where the olives are processed to convert them into oil). However, in the 2025-2026 campaign, the department led by Luis Planas already developed regulations similar to this year's. The smaller harvest, of just 1.29 million tons, meant that in the end it was not necessary to activate this mechanism. Yes, there are several precedents in previous years of what is known as 'private storage', through which oil mills and other market players presented their offers and accessed European subsidies.

How is oil stored?

The Agriculture order only affects oil mills, which have the obligation to withdraw 12% of the monthly production accumulated since last November 1, without it being applicable to what was produced in October. This percentage can be reduced as of December 31, if the Ministry so deems it. Storage, which is the responsibility of the oil mill, must occur in warehouses and warehouses that allow easy identification. They can be their own or third-party facilities, although the operator must provide all the necessary information to the authorities.

What happens next to the stored oil?

It is estimated that the tons withdrawn from the market will amount to 188,000, according to Agriculture calculations. An obligation that, unless decided by the department headed by Luis Planas, expires on September 30, 2027. That is, the 'green gold' that is set aside can be marketed from October 1 of next year when the new 2027-2028 campaign begins.

How long can it be stored without affecting quality?

It will depend on variables such as storage conditions and the previous state of the oil. In the sector they remember that 'green gold' is subject to a natural oxidation process, in which time is not in its favor. If it is not acted correctly, they add, there may be "a risk of loss of quality" that reduces its value when it comes to marketing.

Experience tells us that any impact on source prices has an impact on the consumer. Losses in the category are rarely assumed," warns Javier del Olmo (NIQ)

Can the measure affect me as a consumer?

Yes. Experts consulted such as the executive of NIQ (the former Nielsen) Javier del Olmo recognize the "uncertainty" generated by this new measure and draw on the newspaper archive: "Experience tells us that any impact on source prices has an impact on the consumer. Losses in the category are rarely assumed," he comments to questions from this medium.