Dear Cherubs,

Spain has a rather unusual problem this olive season: there could be so much olive oil that the government wants producers to keep nearly 188,000 tonnes off the market. Yes, while consumers have spent years complaining about the price of liquid gold, Spain is preparing to put a sizeable portion of its latest harvest into storage. And naturally, not everyone is thrilled.

From 6 November 2026, Spanish olive mills must temporarily withhold 12% of their declared production from November onwards, keeping the reserved oil out of commercial circulation until 30 September 2027. October production is excluded.

According to Spain’s Ministry of Agriculture, the measure could remove approximately 188,000 tonnes from the market. That’s roughly four litres of olive oil per person in Spain. Not exactly a small drizzle.

The decision comes ahead of an exceptionally strong 2026/27 harvest. The ministry forecasts approximately 1.6 million tonnes, a 23% increase on the previous season. If achieved, it would represent Spain’s fourth-largest olive harvest on record.

Meanwhile, opening stocks already stood at around 357,040 tonnes. Put those figures together and the government sees a potential oversupply capable of putting further pressure on prices.

THE PRICE OF LIQUID GOLD

The background is a familiar headache for Spanish farmers. After previous seasons of drought, poor harvests and eye-watering prices, production is recovering. However, that recovery has created another problem: prices paid to producers are falling.

According to reporting by Reuters and El País, extra virgin olive oil was trading at around €3 per kilogram in early November, significantly below levels seen a year earlier.

Agricultural organisations including ASAJA, COAG, UPA and Cooperativas Agro-alimentarias had called for intervention, arguing that prices were falling below production costs. Their concern is straightforward: producing more oil means little if farmers cannot sell it profitably.

The government’s argument is that temporarily restricting supply can prevent a damaging price collapse and help stabilise the sector.

However, there is another side to this particular bottle.

THE CONSUMER IS ALSO PAYING ATTENTION

Spain’s competition watchdog, the National Commission on Markets and Competition (CNMC), had already raised concerns about the proposed commercialisation rules.

In its October assessment, the CNMC warned that restricting the quantity of olive oil available could increase prices, reduce product variety and quality, and weaken competition throughout the supply chain.

In other words, protecting producers might come at a cost to consumers. After all, households that have already endured expensive olive oil might reasonably wonder whether keeping thousands of tonnes in storage is the best way to make their shopping bills more affordable.

And then there is the Balearic Islands.

The regional government is preparing an administrative appeal against the measure, arguing that applying the same 12% requirement to every producer ignores the realities of smaller, island-based operations.

According to the Balearic government’s announcement, the islands produce an average of approximately 600 tonnes annually over the past five years. It also estimates that around 40,000 litres would have to be immobilised in Mallorca alone.

Local producers argue that their production does not contribute meaningfully to the national surplus. Reports also indicate that this season’s Balearic harvest could be around half last year’s output.

The regional government believes the additional storage, paperwork and monitoring requirements would create a disproportionate burden. The protected designation Oli de Mallorca is also caught up in the dispute.

So, Spain faces an interesting balancing act: farmers need sustainable prices, consumers need affordable food, and small producers want regulations that recognise their circumstances.

Whether withholding 188,000 tonnes will stabilise the market or simply postpone the problem remains to be seen.

One thing is certain: the olive oil debate is getting increasingly difficult to squeeze into a small bottle.

For further independent commentary and ongoing stories, readers can also explore thisclaimer.com and the Thisclaimer YouTube channel.

Sources and further reading

1. Spanish Ministry of Agriculture (MAPA) — Official announcement of the 12% withdrawal.
https://www.mapa.gob.es/va/prensa/ultimas-noticias/detalle_noticias/bego-a-garc-a—el-futuro-de-la-apicultura-exige-innovaci-n–transparencia-y-apoyo-a-los-productores-/d50defec-3985-424e-ba97-d1906f368b60

2. CNMC — Competition concerns regarding the olive oil commercialisation rules.
https://cnmc.es/prensa/informe-comercializacion-aceite-20261005?page=1

3. Government of the Balearic Islands — Appeal against the withdrawal requirement.
https://www.caib.es/pidip2front/ficha_convocatoria.xhtml?lang=es&urlSemantica=el-govern-prepara-un-recurso-de-alzada-para-solicitar-que-no-se-aplique-en-les-illes-balears-la-retirada-obligatoria-del-12–de-la-produccion-de-aceite-de-oliva-

4. Euronews — Why Spain is taking 188,000 tonnes of olive oil off the market.
https://www.euronews.com/2026/11/06/why-spain-is-taking-188000-tonnes-of-olive-oil-off-the-market

5. Reuters — Spain to hold back 12% of olive oil production.
https://www.reuters.com/

6. El País — Agricultural organisations call for intervention amid falling olive oil prices.
https://elpais.com/economia/2026-10-20/el-campo-urge-a-agricultura-a-intervenir-el-mercado-del-aceite-ante-la-caida-en-picado-del-precio-en-origen.html

7. Thisclaimer — Independent commentary and additional context.
https://thisclaimer.com

8. Thisclaimer YouTube — Videos and commentary.
https://www.youtube.com/@thisclaimer?sub_confirmation=1