Lorraine Williamson
Spain is the world’s largest producer of olive oil, accounting for nearly 50% of global production. The industry is vital to the Spanish economy, supporting thousands of farmers and contributing significantly to exports. Andalucia, in particular, is the heart of Spain’s olive oil sector, with vast groves that have been cultivated for generations.
At the start of 2025, olive oil prices in Spain have fallen significantly, dropping by 55% in just one year. While this is welcome news for consumers, producers worry that the steep decline could put further strain on the sector.
After years of record-high prices, the Spanish olive oil market has entered a period of stabilisation. According to the Spanish Ministry of Agriculture, producer prices have been falling for over two months. As of late January, olive oil is 55% cheaper than it was at the beginning of 2024.
The Ministry, which tracks prices weekly, reports that the decline has continued almost without interruption since September 2024. During the week of 20-26 January 2025, 100 kilograms of olive oil cost €381.89, reflecting a 44.9% drop since the start of the season and a 54.7% decrease compared to the same period last year.
Sharp price drop raises concerns for producers
The decline in olive oil prices poses serious challenges for Spain’s agricultural sector. Olive oil production is not only a key export but also a crucial livelihood for many rural communities. A prolonged period of low prices could lead to economic strain for small and medium-sized producers. This could force some to scale back operations or even exit the industry altogether.
While lower prices benefit consumers, olive oil producers face significant challenges. The price drop in 2025 has been most pronounced for refined olive oil, which declined by 6.34% in just one week. Over the past year, lampante olive oil has been hit hardest, with a 57.9% reduction. This type of oil is not fit for direct consumption and is typically refined to produce Aceite de Oliva Suave or Intenso, commonly sold in supermarkets.
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Why are supermarket prices falling more slowly?
Despite the drastic reduction at the source, supermarket prices in Spain have not dropped at the same rate. According to the consumer organisation FACUA, the retail price of a one-litre bottle of olive oil has fallen by just 24% over the past year, while producer prices have declined by over 50%.
In absolute terms, the average price of a one-litre bottle has dropped from €12.88 to €9.79. However, at the production level, the price per litre has fallen by over €4, whereas supermarket prices have only decreased by €3.09.
Experts attribute this lag to supermarkets still selling stock from previous harvests, which were purchased at higher prices. Consumers are expected to see a more significant price drop once these older supplies are sold and retailers start buying new olive oil at the current lower prices.
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