Back in May we gave the downside scenario a one-in-five chance. It arrived anyway, and through July it has only deepened.
The top of this market, it's now clear, was late March. Our index printed €443/100 kg on 26 March and was still holding €441 in the first days of April. From there it began to give way, gently at first, €434 by 9 April, then with real conviction: €404 by the third week of May, €390 a week later, €380 at the end of June, and into the mid-€350s through July. That's roughly a fifth of the price gone in three months, and as of this writing the fall hasn't found its floor.
Two things pulled the support away at once. The first was political: the EU and the US closed their framework agreement in June and it went live on 1 July, a flat 15% all-inclusive ceiling on EU goods, replacing the old Section 122 surcharge. Overnight, the tariff-free window buyers had spent all spring positioning for simply ceased to exist, and the US demand that had been quietly holding Spanish and Greek origin up went with it. The second was the crop: June fieldwork found Jaén's trees carrying 70-75% loads, and talk started circulating of output up something like 50% year-on-year in Jaén and 30% in Córdoba. When the trade support gives way at the same moment the supply outlook turns generous, prices don't drift lower. They drop.
And yet the whole month turns on a tension the market is choosing to ignore: the heat is real. A mid-June episode left a verified 3-7% fruitlet drop across the affected Andalusian zones, and between 5 and 11 July a second heatwave pushed Jaén, Córdoba and Sevilla to 42-44°C, with overnight lows that never fell below 24°C, the kind of sustained stress irrigation only half answers. The market has decided the recovery crop is big enough to absorb all of it, and July's continued slide says that conviction is hardening, not softening. It may well be right. But refusing to price a risk doesn't make the risk smaller; it just makes the eventual repricing sharper if the fields keep dropping fruit.
Around the Mediterranean
Spain is the story, and the story is the fall. Turnover tells you who's in control: it thinned through May and June as buyers went hand-to-mouth into a dropping market, leaving sellers, cooperatives above all, to chase it down. Stocks had drawn to roughly 340-360 kt by the end of June, a normal seasonal pace and still about a fifth below this point last year, but in a market like this that tightness buys the seller nothing. On the shelf, bulk oil is fetching €4.05-4.30/kg conventional and €4.75-5.00/kg organic, and those numbers have further to fall as origin feeds through.
Everywhere else the usual pecking order is scrambled. Both Portugal (around €395/100 kg) and Greece (around €383) are trading above Spain, simply because neither has the volume to follow Jaén down; Greek closing stocks are thin and Portugal's 165 kt crop is already spoken for. Tunisia is the quiet headline: at roughly €3.71/kg it too now sits above Spain, so the origin that spent the first half of the year as the Mediterranean's discount supply has flipped to a premium, and the H1 arbitrage is simply gone. Italy is on another planet again, Bari near €580/100 kg on the back of a short 302 kt crop, a premium so wide that Italian bottlers keep importing Spanish, Greek and Tunisian oil to fill their blends. And it's worth saying plainly, because it slipped by almost unremarked: Tunisia has now formally overtaken Italy as the world's second-largest producer, not a one-season quirk but the new shape of supply. For reference, the IMF/FRED benchmark came in near USD 5,100/t for June, with July partials lower still as the euro slide passes through.
The crop nobody is pricing
The reference everyone is waiting on is the Junta de Andalucía's autumn aforo, but the survey we already have, its 5 June read, is stale. It found western Andalusia (Sevilla, Córdoba, Málaga, Huelva) broadly normal and the east (Jaén, Granada, Almería) running 12-20% below normal fruit set after the spring heat, and then both summer heatwaves landed after it closed. So what we can actually count today is that June 3-7% fruitlet drop plus the July stress, with a proper cumulative assessment not due until the August pre-aforo signals and nothing truly settling the argument before the October aforo itself. The human cost isn't a footnote: the Carlos III Health Institute ties more than a thousand excess deaths to the June-July heat nationally, and in the growing regions the autumn harvest-labour conversation is already being had in those terms.
Against all of that, the IOC's June meeting put out its first formal 2026/27 numbers: Spain around 1.55 Mt, a genuine recovery from 1.39, with Tunisia at 345 kt, Italy 315, Morocco 245, Greece 240, Portugal 172 and Turkey 178, every one of them set before the heat did its work. The distance between that 1.55 Mt and whatever the October aforo actually prints is where the next two quarters of price action lives. Elsewhere the picture is calmer: Italy and Greece closed their flowering in decent shape across Apulia, Calabria, Sicily, Crete and the Peloponnese, with eastern Crete's rainfall deficit the one flag that won't clear; Tunisia stays dry through the centre and south; Morocco looks fine.
The tariff reset
The biggest change of the month wasn't in the fields, it was between Washington and Brussels. The EU-US framework went live on 1 July, and its flat 15% all-inclusive ceiling replaced the Section 122 surcharge-plus-MFN structure for EU goods. For olive oil that's a net increase, since roughly 10% plus 5¢/kg became a flat 15%, and it wiped out the tariff-free window the market had spent the whole second quarter trading toward. The buyers who had backloaded their Q2 volumes into July-August arrival, expecting to land duty-free, instead landed into a higher tariff, and unwinding that has been feeding the origin slide ever since.
Section 122 still lapses on 24 July, but for European oil the date has quietly become meaningless; EU goods already moved to the deal ceiling. Where it still bites is everywhere else: the administration has signalled Section 301 action of around 12.5% on a 46-country list for roughly the same date, and whether Tunisia and Turkey are on that list is the open question that matters most for Mediterranean bulk. If Tunisia lands on it, the US lane re-prices overnight. In the background, IEEPA refund processing for olive oil importers is about 75% done with the rest expected by the end of Q3, and EU-Mercosur has cleared ratification; its first olive oil tariff cut comes on entry into force, expected in Q4, so the Brazil lane is opening on schedule. EU-India stays at working level.
How it plays out
Put the pieces together and the base case, call it even money, is that the slide decelerates but the trend holds, with Jaén spending the rest of the year somewhere in €330-390/100 kg: the recovery crop arrives close to estimates minus a modest heat trim, the 15% ceiling keeps a lid on export demand, and the October aforo lands in the 1.40-1.55 Mt band. The downside, maybe one chance in four, is that August confirms the heat damage was contained and the aforo comes in at or above 1.55 Mt while US demand stays soft; the sellers who have been chasing the market finally capitulate and Jaén breaks to €300-330, levels unseen since before the 2024 cycle. The upside, also about one in four, is the mirror image: August and September show the damage compounding, the aforo prints below 1.35 Mt, and a market that spent three months refusing to price heat has to price it all at once; add Tunisia to the Section 301 list and the supply picture tightens in the same breath, and Jaén snaps back to €400-460.
Which is really the whole point for anyone trading it. If you're buying, the slide is working for you, but there's no need to catch the bottom in one order; ladder through August while the heat question is still open. If you're selling, stop chasing every downtick; the pre-aforo signals are close enough to wait for, and you may be dumping into the bottom of a market that is ignoring a real supply risk. Above all, respect the asymmetry: the market is priced for the recovery crop and not for the heat, which makes the upside the scenario that hurts an unprepared buyer far more than the downside helps one. At today's mid-€350s, a little forward cover for early-2027 needs is cheap insurance against an expensive surprise.
Disclaimer: This report is prepared using publicly available data from the International Olive Council (IOC), European Commission, FRED/IMF, Poolred, Eurostat, Junta de Andalucía, the Carlos III Health Institute, Olive Oil Times, and other sector sources through 13 July 2026, together with OliveTerm's own price indices. Provisional figures may be subject to revision. This document does not constitute financial, commercial, or legal advice.