Spain’s Olive Oil Market: Prices, Production, and Trade Trends
Oil bottles with alarms still line supermarket shelves as prices keep climbing. Data from the Ministry of Agriculture, Fisheries and Food shows a sharp rise: an average increase of 74.5 percent from the same week a year ago, and 176 percent compared with the last two years. If drought persists, expectations remain unchanged for the year. Analysts from Solunion, including María Ángeles Piñero, note that rains could trigger a price relief from May or June, thanks to improved supply and diminished stock pressures. This marks the second season in a row with reduced production and a notable jump in final price offers for the sector.
Forecasts derive from industry production figures. The current campaign is expected to deliver about 15 percent more production, reaching up to 765,000 tons, yet this remains 34 percent below the four-year average. Meanwhile, stock levels are projected to be 48 percent lower than the same four-year average, at roughly 257,000 tons. Imports are rising to meet distribution needs. In volume terms, olive oil imports have held steady, though slightly below the peaks seen in higher production years. Several factors influence these movements, including Turkey’s August 2023 bulk olive oil export ban and Morocco’s tariff increases since October 2023, yet Spain has managed to sustain a high stock level from 2021/2022. In production terms, Spain is exceeding its own output, with imports and marketing surpassing home production in some periods.
Exports, by contrast, have not followed the same trajectory. Spanish exports of the so-called liquid gold declined by 34 percent in the latest campaign. High prices helped push the unit price to about 6.8 euros per liter, a 74.4 percent increase. As Piñero explains, bottled oil sales depend more on foreign demand than bulk shipments, which are more sensitive to price changes. Even so, price elasticity appears in developing markets where purchasing power is constrained and information about olive oil remains limited. For instance, as of September 2023, sales volume in China fell by 74 percent, while South Korea saw a 65 percent drop.
White Brands and Market Dynamics
Within brand battles, distributors faced blame for persistent sales without a visible decline in volumes. The price gap between branded and white-label packaging narrowed from 12 percent to 9 percent. Sunflower oil emerged as a clear winner in price movements last year due to lower prices on the competing oil. Brands respond with promotions to secure supply and protect margins, according to the report.
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In the midst of rising costs, industrial producers often confront a chain of price transfers to distribution as volumes and margins shrink. Added pressures come from higher financing costs as eurozone rates rise to 4.5 percent, increasing the need for working capital. Last year also saw a rise in defaults linked to higher crude oil costs, even though overall volumes remained below the long-term average.
The drought, combined with extreme temperatures and weather events, has pushed supermarkets to reflect higher prices in consumer aisles. Nearly three-quarters of olive groves rely on rainfall, while irrigated crops and improved productivity could provide steadier yields. The report suggests advancing irrigation and intensive farming could equalize output across smaller plots and larger, older orchards, creating more stable yields per hectare and reducing volatility in supply.