Spanish olive oil producers face shrinking margins as costs rise and prices remain low

Olive growers in Spain are facing mounting pressure from rising production costs and low olive oil prices. Cooperativas Agro-alimentarias de Andalucía, representing more than 342,000 cooperative members in Andalusia, has called on the Spanish government and the EU to strengthen measures supporting the sector.

According to a study by the Spanish Association of Olive-Growing Municipalities (AEMO), average olive cultivation costs have increased by around 57% over the past six years. In traditional olive groves, production costs can reach €5.31 per kilogram of oil produced, significantly squeezing farmers’ margins at current prices.

At the same time, demand for olive oil remains strong. Spanish shipments reached around 135.3 thsd tons in July, almost 20 thsd tons above the five-year average for the month. Stocks fell by more than 113 thsd tons during July to around 568.7 thsd tons at the end of the month.

Andalusian cooperatives say one of the main problems is the weak bargaining position of growers within the supply chain. Rising production costs are not fully reflected in farm-gate prices, prompting the organization to call for legislative reforms, a stronger role for cooperatives and greater direct access to domestic and international markets.

The cooperatives are also calling for tighter controls on olive oil imports into the EU from third countries, particularly supplies entering under duty-free quotas. The issue is particularly important for Andalusia, which accounts for around 75% of Spain’s olive oil production, as the sector seeks to translate the country’s leading position in the global market into better profitability for growers.

Tags: prices, Spain, olive oil