The European olive oil sector is approaching a crucial milestone: the flowering season. From April to the end of May, olive trees will bloom, setting the foundation for the 2025/26 harvest. Our weekly market report draws on insights from industry experts and highlights commercial activities on Wikifarmer. To provide a clearer picture of this week’s pricing, we have gathered data using our Price Insights tool.
Growers in Spain are optimistic about a strong flowering season, which could indicate a promising harvest next year. Market trends show an increase in consumption, driven by lower prices. However, this rising demand may challenge carryover stocks into the next season. On a positive note, this trend could help stabilize prices rather than cause further declines, allowing the market to recover.
As Easter approaches, prices are expected to rebound, with the market splitting into two segments based on stock levels. In Italy, low stocks are supporting higher prices, while in Spain, greater availability may continue to put downward pressure on prices. It is also worth noting that olive oil offered at lower prices is generally of lower quality. In Spain, in particular, high-quality extra virgin olive oil remains scarce.
Looking ahead, the market is likely to decline further in the long term, as producers and mills seek to clear out their tanks rather than hold excessive stocks for the next crop.
Extra virgin olive oil prices in Italy remain high due to limited stock availability, currently hovering around €9.25/kg. Buyers are showing strong purchasing activity in response to the ongoing scarcity.
The Greek market remains sluggish, with stocks still high. Demand is weak at this stage, and many producers are looking to sell their olive oil to meet financial needs ahead of Easter. However, mills report that significant quantities remain stored, as producers are hesitant to sell at current low prices.
Growing Tensions Over US Tariffs
US tariffs on European olive oil significantly disrupt global trade patterns, creating economic challenges for European producers while increasing prices for American consumers. The current tariff structure imposes a 20% tariff on Spanish olive oil compared to 10% for other non-EU countries, with Spanish ripe olives facing a steep 50% tariff from April 2025. This follows historical precedent, as previous tariffs during Trump's administration caused Spanish olive oil exports to plummet from $67 million in 2017 to just $20 million by 2022.
Spain exports approximately 180,000 tonnes of olive oil to the US annually (35-40% of total US imports), with Andalusia's €6 billion industry bearing the brunt of these measures. Italy and Greece are also vulnerable, each sending roughly half their olive oil exports to the American market. With the US importing 97% of its olive oil needs and domestic production meeting less than 5% of demand, these tariffs primarily burden American consumers who face higher prices.
Non-EU producers like Turkey, Morocco, and Tunisia stand to gain market share under this tariff regime. In response, Spain has introduced a €14.1 billion aid package to support modernization and market diversification, while some companies are establishing US bottling facilities to circumvent tariffs on packaged products. Meanwhile, the EU is preparing retaliatory tariffs on US goods, potentially escalating trade tensions further.
The implementation of US tariffs on European olive oil is creating significant anxiety in the industry, affecting both bulk and bottled products. Donald Trump has announced intentions to impose a general tariff of up to 20% on imported goods from the EU, which would include olive oil. This follows previous tariffs imposed during Trump's first administration in 2017, which severely impacted Spanish olive exports.
When tariffs were previously imposed, Spanish olive oil exports to the US dropped dramatically from $67 million in 2017 to just $20 million by 2022. A 25% tariff applied to bottled olive oil in 2019 made EU olive oil significantly more expensive than American alternatives.
European olive oil producers could face tariffs ranging from $0.034 to $0.176 per kilogram. Spain exports approximately 180,000 tons of olive oil to the US annually, representing roughly 40% of total US olive oil imports. For Greece, olive oil is among the strongest exports to the US market, with 45,000 tons shipped in 2024.
Italian producers may be the hardest hit as nearly half of their olive oil exports go to the US. Spanish and Greek producers are also vulnerable, with approximately one-third and one-half of their respective olive oil exports destined for the United States.
Rafael Pico, director of the Spanish Association for the Industry and Commercial Export of Olive Oil, noted that while tariffs would force the sector to "explore other markets," the "main impact would be on the US consumer, who would have to pay a higher price for olive oil" given that US domestic production is "very low" and cannot meet domestic demand.
The EU is preparing a list of US products to target with retaliatory import tariffs in the ongoing trade dispute, potentially escalating tensions further. The combination of market stabilization following weather challenges and the looming threat of significant US tariffs is creating a complex environment for European olive oil producers, who must navigate both immediate market conditions and potential major disruptions to their export strategies.
In the coming months, the European olive oil market will be shaped by both seasonal and geopolitical factors. While the flowering season offers hope for a stronger 2025/26 harvest, short-term pricing dynamics and stock levels will continue to influence market movements. At the same time, the reintroduction of US tariffs presents a significant risk to European exports, particularly for Spain, Italy, and Greece. As producers and exporters adapt to these evolving challenges, market resilience, and strategic diversification will be key to sustaining growth and stability in the global olive oil trade.
References
https://english.news.cn/20250322/b5c7b9a6917144f7b7c094f084b208b4/c.html
https://blog.esao.es/en/us-tariffs-for-european-olive-oil
https://www.euronews.com/my-europe/2024/11/04/how-the-us-elections-threaten-spains-olive-oil-market
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