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The Spanish government's new market regulation, requiring mills to withhold a percentage of olive oil production, has hit its first major obstacle as the Sant Bartomeu agricultural cooperative in Sóller, Mallorca, officially halted purchases from local producers. This move follows the implementation of rules designed to manage a projected national surplus, though regional stakeholders warn of severe local consequences.
Under the regulation published on November 6, mills must retain 12% of their declared production from November 2026 until September 30, 2027. While intended to prevent price collapses due to high supply, the cooperative’s president, Miquel Gual, fears the financial risks of holding stock that may degrade in quality over the mandatory storage period.
Gual highlights that olive oil, unlike wine, loses freshness, aroma, and commercial value over time. If extra virgin oil stored until 2027 is downgraded due to oxidation, the cooperative faces significant losses by selling at prices lower than the original purchase cost. Normally, the cooperative handles between 50 and 70 tonnes of olive oil annually.
Furthermore, the regional reality in Mallorca contrasts sharply with mainland Spain. While the national policy addresses a surplus, Mallorca’s production is expected to reach only 60% of last season's levels. The Balearic Government is now seeking an exemption, arguing that the island’s small output has a negligible impact on national pricing but faces disproportionate storage risks.
Spain’s competition regulator, the CNMC, had previously cautioned that such restrictions could limit variety and potentially increase consumer prices. While Sant Bartomeu continues to process and store olives, its refusal to buy new oil leaves small-scale growers in a precarious position as they search for alternative buyers during the peak harvest season.
Source: Euro Weekly News