`Supply Rebound Pushes Prices Down as Uncertainty Clouds Outlook - Olive Oil Times
Enter keywords and hit Go →
enEnglish
enEnglishfrFrançaiselελληνικάdeDeutscheitItalianozh-CN中文ptPortuguêsesEspañoltrTürkçehrHrvatskija日本語hiहिंदी
enEnglish
enEnglishfrFrançaiselελληνικάdeDeutscheitItalianozh-CN中文ptPortuguêsesEspañoltrTürkçehrHrvatskija日本語hiहिंदी

Supply Rebound Pushes Prices Down as Uncertainty Clouds Outlook

By Paolo DeAndreis
Apr. 28, 2026 14:13 UTC
Summary Summary

The olive oil mar­ket in Europe is sta­bi­liz­ing after a period of volatil­ity, with pro­duc­tion rebound­ing sig­nif­i­cantly in Spain and Greece but declin­ing in Italy. Prices have dropped sharply due to increased sup­ply, lead­ing to expec­ta­tions of higher con­sump­tion and exports, although con­cerns about cli­mate change and exter­nal sup­ply dynam­ics per­sist.

Olive oil mar­ket fun­da­men­tals in Europe are sta­bi­liz­ing after an excep­tional period, although the sec­tor remains exposed to renewed volatil­ity dri­ven by cli­mate and geopo­lit­i­cal uncer­tainty.

According to the European Commission’s Spring update to its Short-term Outlook, E.U. agri­cul­ture is return­ing to rel­a­tive sta­bil­ity, albeit within a weaker eco­nomic envi­ron­ment shaped by per­sis­tent infla­tion and high input costs.

Rising energy prices, trans­port costs and fer­til­izer expenses con­tinue to weigh on the sec­tor, keep­ing pro­duc­tion costs ele­vated across agri­cul­ture.

In the olive oil sec­tor, a sig­nif­i­cant increase in out­put dur­ing the cur­rent mar­ket­ing year is exert­ing strong down­ward pres­sure on prices. However, early signs sug­gest the 2025/26 sea­son may fall short of ini­tial expec­ta­tions.

After two con­sec­u­tive years of his­tor­i­cally low pro­duc­tion, which pushed prices to record lev­els, European Union out­put in 2024/25 is esti­mated at about 2.1 mil­lion tonnes, a 37 per­cent increase year-on-year and roughly 15 per­cent above the five-year aver­age.

The recov­ery is led by Spain, where pro­duc­tion surged by about 66 per­cent to 1.4 mil­lion tonnes. Greece also recorded a strong rebound, with out­put up 43 per­cent, while Portugal posted a more mod­est increase of around 10 per­cent.

By con­trast, Italy expe­ri­enced an off-year, with pro­duc­tion declin­ing by about 25 per­cent, pre­vent­ing domes­tic prices from fol­low­ing the broader European down­ward trend.

The sup­ply rebound has led to a rapid price cor­rec­tion. After peak­ing above €8.3 per liter in Spain in January 2024, extra vir­gin olive oil prices fell by roughly half by January 2025 and declined fur­ther to about €3.2 by June. Spanish prices have now dropped below the five-year aver­age.

Lower prices and improved avail­abil­ity are expected to lift olive oil con­sump­tion back toward its five-year aver­age of around 1.4 mil­lion tonnes, after sev­eral years of reduced demand.

Exports are pro­jected to rebound by about 25 per­cent to 760,000 tonnes, sup­ported by improved com­pet­i­tive­ness and stronger ship­ments to mar­kets includ­ing the United States, Canada, Australia and China. Imports are also expected to rise by roughly 15 per­cent to 240,000 tonnes, with Tunisia play­ing a key role in bal­anc­ing sup­ply gaps within the European Union.

Ending stocks are fore­cast to reach about 450,000 tonnes, indi­cat­ing a more com­fort­able sup­ply posi­tion com­pared to recent years.

Despite this rebal­anc­ing, early signs of heat stress in major pro­duc­ing regions are rais­ing con­cerns about the next har­vest, high­light­ing the sector’s expo­sure to cli­mate change.

Longer-term pro­jec­tions sug­gest that future growth will increas­ingly depend on higher yields and orchard mod­ern­iza­tion rather than on expand­ing cul­ti­vated areas, a trend con­sis­tent across European Union agri­cul­ture.

Food infla­tion is expected to remain above gen­eral infla­tion lev­els in 2025. While prices for cook­ing oils, includ­ing extra vir­gin olive oil, have begun to sta­bi­lize or decline, they remain sig­nif­i­cantly higher than in the pre­vi­ous decade.

Production costs remain ele­vated, up about 30 per­cent com­pared to 2020, par­tic­u­larly affect­ing regions with lower or more vari­able yields.

The Commission notes that most vul­ner­a­bil­i­ties in European agri­cul­ture are cli­mate-related, mean­ing that favor­able con­di­tions can quickly reverse, tight­en­ing sup­ply and push­ing prices higher again.

At the same time, the report does not fully cap­ture the com­plex­ity of cur­rent import flows. Tunisian olive oil enters the European mar­ket through both trans­par­ent and less trace­able sup­ply chains, par­tic­u­larly once blended or re-exported under European brands. These lower-priced imports cre­ate addi­tional com­pet­i­tive pres­sure that is not fully reflected in the analy­sis.

While the rebound in European pro­duc­tion, espe­cially in Spain, remains the pri­mary dri­ver behind falling prices, exter­nal sup­ply dynam­ics likely amplify the down­ward pres­sure, sug­gest­ing a more com­plex mar­ket bal­ance than the report indi­cates.

More articles on:  , ,

Advertisement

Related Articles