Spain’s Olive Oil Growers Face Rising Costs as Cultivation Expenses Jump 57%

Spain, the world’s largest olive oil producer, is facing a structural cost crisis: olive cultivation expenses have risen roughly 57 percent over the past six years even as farm-gate prices for olive oil keep falling, according to a new warning from Andalusia’s leading agricultural cooperative federation.

Cooperativas Agro-alimentarias de Andalucía, which represents more than 342,000 members across nearly every agri-food cooperative in the region, said on September 2, 2026 that rising production costs combined with weak olive oil prices are exposing structural weaknesses in Spain’s olive oil supply chain, and it is calling on the Spanish government and the European Union for legal reform and stronger market protections.

Costs up 57% in six years, some groves paying €5.31 per kilogram

According to the latest Olive Cultivation Cost Study published by the Spanish Association of Olive-Growing Municipalities (AEMO), average olive cultivation costs have climbed by approximately 57 percent over the past six years. The increase varies significantly by farming method, with the most traditional, low-yield groves now facing production costs of up to €5.31 per kilogram of oil — a level that leaves little to no margin at current market prices. The Federation argues that growers have relatively little influence over the prices set by processors and retailers, while their own costs keep climbing, squeezing margins from both directions.

Strong shipments, shrinking stocks, and a call for reform

The pressure on growers is not for lack of market activity. Spanish olive oil shipments in July 2026 reached an estimated 135,312 tons, almost 20,000 tons above the five-year average for the month, while total stocks stood at approximately 568,700 tons on July 31, down more than 113,000 tons from the previous month. Andalusia alone accounts for roughly 75 percent of Spanish olive oil output, in a country that remains the world’s number one producer. The Federation is calling for reform of Spain’s Food Chain Law, closer cooperation between authorities and producer cooperatives, stronger investment in branding and international marketing, and tighter European Union oversight of olive oil entering the bloc under duty-free quotas and inward-processing arrangements, which it says can put artificial downward pressure on prices paid to growers.

For international buyers, the situation in Spain is a reminder that even the world’s largest producer is not immune to margin pressure and supply-side friction — one more reason importers are increasingly looking to diversify their sourcing. Tunisia, the world’s second-largest olive oil exporter, has expanded its own export volumes sharply this season and offers buyers a competitively priced, high-quality alternative for both bulk and packaged oil as European supply chains navigate these structural challenges. Buyers evaluating Tunisian suppliers should note that origin diversification is becoming a standard risk-management strategy across the industry, not just a cost play.

FAQ

Why are Spanish olive oil production costs rising?
Spanish olive cultivation costs have increased by about 57 percent over the past six years, driven by higher input, labor, and operating expenses, with the most traditional low-yield groves now facing costs of up to €5.31 per kilogram of oil, according to the Spanish Association of Olive-Growing Municipalities (AEMO).

Is Spain still producing and shipping large volumes of olive oil despite the cost pressure?
Yes. Spain shipped an estimated 135,312 tons of olive oil in July 2026, about 20,000 tons above the five-year average, showing that demand and market activity remain strong even as growers’ margins are squeezed by rising costs and falling farm-gate prices.

Source: Olive Oil Times