Olive oil: the recovery in Spanish production is hitting Italian extra virgin olive oil hard: price down 47 per cent

After two years of tight supply (due to the shortfall in Spanish production, which was in turn caused by drought), the global olive oil market is set to return to normal. This means a return to normal product availability, the replenishment of stocks and – above all – a fall in prices. This has been reported by Areté, Italia’s leading company in the monitoring and analysis of agri-food commodity prices.

“The extra virgin olive oil market,” Areté writes, “is heading into the 2026–27 season with supply recovering and prices falling sharply compared with the peaks of the last two years. ‘During 2026,’ Areté continues, ‘prices for EU extra virgin olive oil have returned to their lowest levels since 2022, whilst Italian olive oil has seen a 47 per cent drop in the last year alone.’

As a result of these figures, the price premium that Italian extra virgin olive oil has traditionally enjoyed on the markets compared with the EU product has also narrowed: ‘it has fallen – the analysis firm adds – from over 5,300 euros per tonne recorded in June 2024 to just over 900 euros per tonne in September 2026”.

But how did this slump come about? The main factor driving the fall was the restocking triggered by the return to normal production levels in Spain. Following two difficult seasons, mainly due to drought, Madrid is now seeing the first official estimates for the 2026–27 harvest indicating a figure of 1.6 million tonnes – a full 29 per cent higher than the previous season. If confirmed, the Spanish harvest would bring total Spanish supply at the start of the marketing year close to the highest levels ever recorded in the 2021–22 marketing year.

“However,” Areté goes on to say, “there are still some uncertainties. Weather conditions over the coming weeks will be decisive for olive oil yields in Spain, whilst production declines are already forecast in Italia and Tunisia.”