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The global olive oil market is poised for a significant correction as it transitions from two years of acute supply shortages toward normalization. According to the latest analysis from Areté, a prominent Italian firm specializing in agri-food commodity monitoring, the industry is witnessing a return to standard product availability, the rebuilding of depleted stocks, and a substantial cooling of prices that had previously reached record highs.
Areté reports that the extra virgin olive oil (EVOO) market is entering the 2026–27 season with a robust recovery in supply. During 2026, prices for EU-sourced EVOO retreated to their lowest levels since 2022. The impact has been particularly pronounced for Italian olive oil, which saw its market price plummet by 47 percent over the course of a single year.
This downward trend has significantly eroded the premium price that Italian extra virgin olive oil has historically commanded over its European counterparts. The analysis reveals that this premium narrowed from over 5,300 euros per tonne in June 2024 to just above 900 euros per tonne by September 2026.
The primary driver of this market shift is the recovery of production in Spain, the world's leading producer. Following two consecutive seasons crippled by drought, official estimates for the Spanish 2026–27 harvest suggest a yield of 1.6 million tonnes—a 29 percent increase over the previous season. If realized, these figures would bring Spain's total supply at the start of the marketing year close to the historic peaks seen in 2021–22.
Despite the optimistic outlook, Areté notes that several variables remain. Weather patterns in the coming weeks will be critical for final oil yields in Spain, even as production forecasts for Italy and Tunisia indicate potential declines.
While the price drop presents a challenge for olive growers and producers, it is expected to provide much-needed relief for consumers. Lower price points could stimulate a recovery in demand, which had suffered a sharp contraction during the period of peak prices.
In conclusion, Areté observes that while the market is entering a phase of gradual normalization, the risk of volatility persists. Future price movements will depend heavily on climatic conditions, the elasticity of consumer demand, and the commercial strategies of Spanish producers, many of whom may be reluctant to sell as market prices approach their break-even production costs.
Source: Il Sole 24 ORE