Spanish Olive Oil Market Guide

The price of Spanish olive oil keeps increasing due to the low supply of extra virgin olive oil. Prices of Portuguese and Turkish olive oil are also attractive, but nothing is cheaper than Spanish olive oil. Despite US setting import tariffs on EU products starting July 2020, there is no change in demand in the US after the tariff barrier, but the suppliers expect less production this year.

The chart below shows the SWOT analysis for the Spanish olive oil market including its strengths, weaknesses, opportunities, and threats.

Spanish oil mills hire brokers to commercialize the products to refineries. Additionally, logistic platforms are used by producers and refineries to commercialize the products as well. These wholesale markets are generally run by distributors. As of now, 86% of total olive oil production is commercialized by hyper and supermarket chains. On a smaller scale, individual retailers establish operations in order to commercialize products directly to consumers.

Regarding storage methods, olive oil is typically stored in complete darkness, regulated at 20 degrees Celsius. When it is bottled for commercialization, it also cannot be exposed to sunlight for more than 12 hours a day. EVOOs are specifically commercialized within six months of being stored in tanks in order to maintain acceptable quality.

Most of the time, producers do not have their own packing houses. The middlemen in the process are traders/exporters and producers / hypermarkets-supermarkets such as Carrefour. For the extra virgin(best quality), the acidity level should be a maximum of 0-8%; the lower level is called virgin olive oil. Depending on the acidity level, the levels are categorized as extra virgin - virgin - pure. Commonly used olives for oils are picual(main olive), ojiblanca/ cornicabra / arbequina olive. If the oil is preserved in the right condition, it can be stored for a year.

As of 2017, over 96.8% of olive oil production is centered across Mediterranean countries, with around 62% of total production specifically being within the EU. The top five producers of olive oil in order are Spain, Italy, Greece, Turkey, and Morocco. The USDA predicted that the overall production of olive oil would enter its third consecutive year of decline in the 2020-21 period, lowering from 3.12M MT in 2019-20 to 3.03M MT. However, most of this decline is primarily associated with the producer's Turkey and Tunisia, who together comprise 14.4% of global production and are both predicted to have off years for olive oil. Tunisia specifically is expected to have a 35% decrease compared to the previous season. EU countries will likely reflect similar production yields as the already disappointing 2018-19 season according to the USDA.

Andalucia, Jaen is the main producing region for Spanish Olive Oil.

Extra Virgin Olive Oil, or EVOO, is the most well-known type of olive oil. It is characterized by not containing any additives or preservatives. Commonly used in seasonings and salads, extra virgin olive oils are subject to higher scrutiny during the producing process.

Portugal and Italy are the main importing countries and also the top producing countries in the world. Demand in the US, UK, and Japan is rising.

The demand in India is increasing right now, and buyers want the product at a very cheap price. Because of the price, the buyers from India tend to purchase the olive oils from last year(shelf life is 2 years) - which are likely to be less fresh than this year - at cheaper prices.

Several markets have started to import more olive oil in the past decade. Spain, Japan, China, and Saudi Arabia are among the biggest growing markets. Due to increased demand in consumption, imports increased by 210%, 60.7%, 110%, and 169% respectively. In 2015, Spanish demand for olive oil reached even as high as USD 620M, which is a 428% difference from 2010 numbers.

There are no special regulations regarding olive oil export wherein only the acidity analysis on the olive oil is required when exporting, and the analysis will not differ too much across the batches. However, there are labeling requirements, it must mention the name of the category: (extra virgin, virgin, olive oil composed of refined olive oils and virgin olive oils, olive-pomace oil) and must mention specific characteristics. Also, if there is a specific geographical indication: PDO (Protected designation of origin), PGI (Protected geographical indication), it must be included and mention origin.

The quality of Spanish olive oil depends on the acidity, and exporters ask for the acidity analysis which should be below 0.8 to meet the standard of “Extra Virgin”. The acidity analysis could be done by a third party - such as an inspection institute, or via an in-house facility.

There are required licenses/certificates. Those are Phytosanitary Certificate, the expiry date for products not less than 2 years remaining, Health certificate, Analyses certificate, Certificate of origin issued by the chamber of commerce.

Olive oil typically must go through similar tests as other commerce, such as for sanitation, in order to be considered acceptable for export and import. These certificates include a phytosanitary certificate, a certificate of origin issued by the Chamber of Commerce, an analysis certificate, and a health certificate. The expiration date for products must also not be less than two years remaining.

The table below shows the export trend of Spanish virgin olive oil. Spanish olive oil has seen a decreasing trend in total export value since 2017; export value decreased from USD 4.1B in 2017 to USD 3.2 B in 2021. The largest importer of Spanish virgin olive oil is Italy, with an import value of USD 775.2M. Italy is followed by the United States, Portugal, and France.