Spain’s olive oil harvest is expected to rebound, adding to supply and putting pressure on prices. The government has asked farmers to hold back 12% of this season’s output—about 188,000 tonnes—until the end of September 2027. The measure is intended to support producer returns, though its effect may be limited by global supply and the risk that stored oil loses its extra-virgin grade.
Spanish output forecast at 1.6 million tonnes
The olive harvest began in September. Drought and high temperatures had reduced production in Spain and other growing regions in recent years, but improved weather this spring is expected to lift Spain’s output by 23% year on year to 1.6 million tonnes. That would be the country’s fourth-largest crop on record.
The Agriculture Ministry requires farmers to keep the designated share on their farms or place it in third-party storage facilities through September 2027. The government says the arrangement is intended to protect farm profitability while taking buyers’ interests into account, and to provide greater stability for producers and consumers. EU rules permit temporary storage of olive oil, provided it does not unduly distort the market.
Andalusian prices down about 15% in two months
Expectations of a larger crop have already weighed on prices. The average olive oil price at mills in Andalusia stood at €2.93 per kilogram at the end of last week, down about 15% in roughly two months. A concentrated release of supply could further reduce producers’ revenues, while improved availability may lower procurement costs for buyers.
The storage plan has not won universal support in the industry. Olive oil is traded in a global market, but the requirement applies only to Spanish producers, so limiting sales in one country may not shift the broader supply-demand balance. Large buyers also hold substantial stocks, meaning the measure may not lift prices quickly.
Storage time could affect oil grade
Kyle Holland, a senior analyst at commodity data company Expana, has cautioned that olive oil quality changes over time. After several months in storage, some oil may no longer meet the standards for extra-virgin classification. The plan therefore does more than defer supply: storage conditions and duration, as well as the grade the oil ultimately qualifies for, could affect its commercial value.
The impact on prices will depend on how much oil is actually stored, how long it remains in storage and how supplies from other producing regions change. The government’s plan covers about 188,000 tonnes, but its immediate effect on prices remains uncertain. Producers and buyers will also have to account for any change in quality during storage.
Commodity reserves face shifting supply and demand
Reserve policies for other commodities are also being tested by changes in weather, demand and production. A strategic maple syrup reserve managed by Quebec’s producers’ organization is expected to run out by February. Production will continue, but depleted stocks would leave less room to cushion fluctuations in output. Maple syrup production is weather-dependent, and producers have expanded into markets outside the United States as demand has grown. Last year, US consumers bought Canadian maple syrup early amid expectations of tariffs, helping lift annual exports by nearly 16%, compared with 9% in 2024.
Energy and agricultural reserves face different pressures. The Iran war has prompted several oil-consuming countries to draw on crude stocks, while the US Strategic Petroleum Reserve has fallen to its lowest level since 1982. Japan drew on rice reserves last year amid bad weather and fears of natural disasters that triggered panic buying; this year, the country has shifted to a record surplus.
China’s pork market has also moved from tight supply to oversupply. Prices surged after African swine fever broke out in 2019, prompting the government to release strategic pork reserves. Now, weak consumer demand and the effects of earlier policies encouraging production have contributed to a 39% fall in pork prices over the past four years. The government has made several purchases to replenish reserves and support the market. As these examples illustrate, Spain’s olive oil plan will depend on production, demand and inventory levels—not storage alone.