An aerial view of agricultural workers washing grapes, with a mixture of water, olive oil and potassium carbonate called “posata” to make them look brighter and protect them from the burning rays of the sun in Menemen Plain of Izmir, Turkiye, on Aug. 27, 2024.
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The chief executive of Spain’s Deoleo, the world’s largest olive oil producer, says a bumper harvest and improving market sentiment show that the industry is recovering from one of its toughest moments ever.
A substantial olive harvest, notably in Spain, has helped to restore confidence in the sector and led to a pronounced fall in prices for both extra virgin and virgin olive oils in supermarkets.
It comes after two consecutive seasons of poor yields resulted in a period of extraordinary turbulence throughout the olive oil value chain.
A perfect storm of climate change-fueled extreme weather, high interest rates and robust inflation culminated in a dizzying price rally of the liquid fat last year — one that stunned consumers and industry veterans alike.
Deoleo CEO Cristóbal Valdés said “a major shift” has since been underway, however.
“What was once one of the most challenging periods in our history — marked by a scarcity of raw materials, high price volatility, and declining consumption — is now giving way to a more normalized and promising market landscape,” Valdés told CNBC by email.
Deoleo, the maker of household olive oil brands such as Bertolli and Carbonell, said it expects an environment of more contained raw material prices to persist throughout the second half of 2025.
“The significant rebound in the olive oil harvest — particularly in Spain — is already translating into more stable supply conditions, and this is having a direct impact on prices at origin,” Valdés said.
“While some volatility may persist, we believe the trend towards normalization will hold,” he added.
‘Cautiously optimistic’
Most of the world’s supply of olive oil comes from the Mediterranean, with southern European countries such as Spain, Italy and Greece among the world’s leading producers of the commodity.
Spain, in particular, is the biggest olive oil producer in the European Union and a global reference for prices.
Spain’s Ministry of Agriculture, Fisheries and Food said the country produced 1.41 million metric tons of olive oil in the 2024/2025 crop year. The yield, which was slightly less than forecast, marked a roughly 65% increase from 855,600 metric tons a year earlier.
A person holds a bottle of olive oil on June 21, 2024, in Barcelona, Catalonia, Spain.
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Deoleo’s CEO said the bumper Spanish harvest prompted a 50% drop in raw material prices, stimulated demand and allowed the company to lower olive oil prices at the shelf.
“Our outlook is therefore cautiously optimistic: we anticipate a more balanced market, where responsible pricing and a focus on value will be key to sustaining growth and ensuring long-term category health,” Valdés said.
Deoleo’s CEO also said the more favorable market conditions had allowed the company to double its investment in advertising and promotion to 10 million euros ($11.63 million).
Speaking to CNBC before the U.S. and EU agreed to a tariff rate of 15% for most EU goods from Aug. 1, Valdés said the company intended to ramp up its communication, marketing and consumer engagement efforts to ensure olive oil remains an everyday staple.
