Olive Oil Prices Slide Sharply, Fuelling Calls For Market Withdrawal Scheme

Growing concerns over a sharp drop in olive oil prices at origin ahead of the 2025/2026 harvest have prompted calls to activate the surplus withdrawal mechanism under EU Regulation 1308/2013 in order to prevent a further price collapse.
However, olive oil consultancy Fielcon believes it is still too early for such a step, arguing that prices have not yet reached the critical levels that would justify intervention.

According to data from Infaoliva, olive oil prices at origin have fallen to their lowest levels since June 2022, with extra virgin olive oil priced at €3.358 per kilogramme, virgin olive oil at €3.092, and lampante oil reaching €2.953.

Calls To Activate Mandatory Withdrawal Mechanism

Cooperativas Agro-alimentarias Andalucía, the federation of Andalusian agricultural cooperatives, has called for the activation of Article 167 of the EU regulation, which allows for a mandatory olive oil withdrawal mechanism in cases of clear market imbalance.

The organisation wrote on its website:

"This mechanism is essential to regulate supply without negatively affecting the sustainability of olive groves, particularly the most vulnerable ones such as rain-fed (non-irrigated) groves, which account for more than 70% of the planted area."

Fielcon: Prices Have Not Yet Reached "Critical Pressure" Levels

Juan Vilar, chief executive of Fielcon, warned that activating this mechanism at the current time could actually deepen the downward trend in prices.
He added:

"We don't yet know the size of next season's production, so it's premature to use tools that would artificially influence prices."

He explained that the price thresholds at which the current EU storage mechanism could be triggered are:

• €1.78/kg for extra virgin olive oil
• €1.71/kg for virgin olive oil
• €1.50/kg for lampante oil

He added:

"Current prices have not yet reached those critical levels."

How Does The European Storage Mechanism Work?

If activated, the storage mechanism operates through market tenders, in which producers submit bids to store quantities of virgin or extra virgin olive oil in sealed tanks for a minimum of 180 days, at a price set by the European Commission.

Once the storage period ends:

• the oil is released back onto the market
• the producer receives financial support in return for not selling their stock during the storage period

The measure aims to temporarily "freeze" part of the supply, thereby limiting price deterioration.

Concerns Over Abundant Production And Falling Profitability

Some forecasts from Andalusia suggest that olive oil production could reach 1.6 million tonnes in the 2025/2026 season, which would add further pressure on prices.

For medium and large producers, prices falling below €3/kg make operations economically unviable. Small producers, meanwhile, consider prices below €7/kg unsustainable, although they often focus on quality and sell above market prices.

Clear Rise In Stocks

According to Spain's Ministry of Agriculture, Fisheries and Food, olive oil stocks in Spain stood at 762,800 tonnes after the first eight months of the 2024/2025 season, up 55% on the same period last year and 8% above the average of the previous four years.

Spain is expected to enter the 2025/2026 season, which begins on 1 October, with stocks slightly above 400,000 tonnes, in line with the average of the last four years.

Cooperativas Andalucía concluded:

"The mandatory withdrawal mechanism should be activated whenever the estimated availability of olive oil (production plus stocks plus imports) exceeds the average volume moved through the domestic market and exports."

Source: Olive Oil Times