Why has the Ministry of Agriculture applied Article 167Bis of Regulation (EU) 1308/2013 of the Common Organization of the Markets for agricultural products in the European Union and what effects could it have on the Spanish olive-oil sector?
We are facing an olive-oil production campaign that possibly, at the international level, could be the highest in history, taking into account that the highest of all so far was the 2024/25 campaign, with almost 3.5 million tons. Then Spain had a production that was below or equal to the average, a circumstance that is likely to be different on this occasion, so, for now, probably, the current campaign may be the highest of all time, reaching 3.7 million tons of olive oil and even surpassing them.
All the olive groves that have been planted recently in the current 67 countries that already produce olive oils contribute to this, so that there are already more than more than 11.7 million hectares of olive groves that are cultivated across the entire planet.
To this must be added two exceptional circumstances: one, that for the first year in more than a decade, there has been a collapse in the price of table olives at origin, which will cause the destination of this fruit to be oriented toward olive-oil production, especially in Turkey, Greece, Egypt, or Spain. And two: almost all producing countries have an olive-oil production campaign that is above average.
In Spain the stock is 357,040 tons and the production forecast of the Ministry of Agriculture, Fisheries and Food is 1,602,596 tons, which added together gives the amount of 1,959,636 tons. In this way, it exceeds by 120% the historical average availability of the last six campaigns.
To be able to legally activate Article 167 bis of the EU Regulation, the regulations require that the sum of the initial stocks and the estimated production exceed at least 120% of the average recorded in the last six campaigns, a circumstance that exists currently, as can be seen.
Therefore, the resulting calculation would be 1,602,596 tons by the 12% that is what has been decided to withdraw from the market, giving 192,311.5 tons. The Ministry formally estimates the expected actual immobilization at around 188,000 net tons of olive oil once the technical adjustments for losses and actual milling yields have been applied.
The effects
In the short term, because it is the first time that this legislation is brought to light and applied, it has affected the planning of the entire value chain, fundamentally in the case of farmers who will not be able to dispose of, from its implementation, and until September 2027, of 12% of their harvest, which will affect their way of financing.
On the other hand, for the olive mills, fundamentally the industrial ones (since cooperatives are owned by farmers), it entails the obligation to keep in custody that 12% of their growers, in addition to introducing a new component of the cost breakdown: the custody and maintenance of that percentage of oil, while at the same time generating a series of doubts in its application, because it is the first time in history that this happens.
At the macroeconomic level the situation is different: those 188,000 tons represent a temporary withdrawal of part of the supply, and its effects could be positive for the farmer, since by containing supply temporarily, the fall in price could stop, and the floor of prices, likewise, supposedly would be less deep. This would also be helped by the state inspection and sanction tools through AICA, and by current legislation such as the Food Chain Law.
For bottlers, distributors and retail, the effect would be the opposite: this situation would raise the value of the product that they must supply, and for the end consumer, the same would happen, but for the latter, the increase would be almost undetectable, and with effects that are almost nonexistent, due to the amount of per capita consumption of olive oils in Spain per year.
Nevertheless, we are all awaiting the results of a regulation that in 2026 is being applied for the first time and is generating controversy in the sector.