The biggest problem facing Spain's olive oil sector isn't high costs or climate change—it's 'ghost oil'. This shadowy issue has come to light as origin prices have plummeted by nearly 46%, leaving everyone nervous. The numbers don't add up, and the bill won't be paid by the large olive oil groups but by small producers.
On June 15, a representative from COAG (Coordinator of Farmers' and Ranchers' Organizations) took to the microphones to denounce that 81% of Tunisian olive oil was entering Spain covertly. But how do you move 65,500 tons of oil under the radar? It hasn't been easy to determine.
If COAG is right, the olive oil ship has more than one leak compromising its future.
What Is 'Ghost Oil' and Why Is It a Problem?
The term 'ghost oil' refers to olive oil that enters Spain through unusual channels, often under special customs regimes, and is then sold as if it were Spanish or European. This practice distorts the market, undercuts local producers, and confuses consumers.
COAG claims that a significant portion of Tunisian olive oil is entering Spain via Portugal. However, the 'Portuguese route' doesn't add up: with data from the 2024-2025 campaign, Portugal produces between 160,000 and 195,000 tons of its own olive oil and imported only 3,406 tons of Tunisian oil. Those 3,406 tons cannot explain the 131,877 tons that Portugal re-exports to Spain. Part of it, yes, but not all.
The problem seems to be ours, in fact. Because COAG is likely right that a good portion of that oil entered the country under a special regime: active processing. This is a formula from the European Union Customs Code that allows importing non-EU goods under suspension of duties, provided they are re-exported or undergo processing.
How Does the Active Processing Regime Work?
Under active processing, companies can import raw materials without paying tariffs or VAT, as long as the final product is exported or re-exported. This regime is meant to boost competitiveness, but it can be abused if the processed oil is sold within the EU without proper oversight.
According to COAG, some operators are using this loophole to bring in Tunisian oil, process it in Spain, and then sell it as Spanish or European, bypassing quotas and tariffs. This floods the market with cheaper oil, driving down prices for legitimate producers.
The Impact on Spanish Olive Oil Producers
The drop in origin prices is devastating for small producers. Many are struggling to cover costs, and some may be forced out of business. The large olive oil groups, however, are less affected because they can absorb the price fluctuations or even benefit from cheaper imports.
COAG's denunciation highlights a growing frustration among farmers who feel abandoned by both the government and the EU. They argue that without stricter controls, the 'ghost oil' problem will only worsen, threatening the livelihoods of thousands of families dependent on olive groves.
Key Takeaways
- COAG alleges that 81% of Tunisian olive oil enters Spain covertly, largely through Portugal.
- The active processing regime allows duty-free imports if the oil is re-exported, but oversight is lax.
- Origin prices have fallen nearly 46%, hurting small producers the most.
- Portugal's re-exports to Spain far exceed its imports of Tunisian oil, suggesting other routes or loopholes.
- Without stricter controls, the 'ghost oil' crisis could undermine Spain's olive oil sector.
Data Comparison: Portugal's Role in the Olive Oil Trade
The table below summarizes the discrepancy between Portugal's production, imports, and re-exports of olive oil, highlighting the implausibility of the 'Portuguese route' as the sole explanation.
| Indicator | Volume (tons) |
|---|---|
| Portugal's own olive oil production (2024-2025) | 160,000–195,000 |
| Tunisian olive oil imported by Portugal | 3,406 |
| Olive oil re-exported from Portugal to Spain | 131,877 |
As the data shows, Portugal's imports of Tunisian oil are minimal compared to its re-exports to Spain. This suggests that either the oil is entering Spain through other means or that the active processing regime is being exploited.
What's Next for Spain's Olive Oil Sector?
COAG is calling for an investigation into the active processing regime and stricter controls on imports. The Spanish government has yet to respond officially, but the issue is gaining attention as prices continue to fall. The background to this story is set out in Spain's Tariff Loophole: 76% of Tunisian Olive Oil Enters Duty-Free. A related thread runs through Olive Oil Price Rise Expected as European Crops Suffer Heat. Earlier coverage in Spain May Trigger Olive Oil Withdrawal to Stop Price Collapse shows how the argument developed.
For consumers, the 'ghost oil' problem may mean lower prices at the supermarket, but it also raises questions about quality and transparency. For producers, it's a matter of survival. The outcome will depend on whether authorities can close the loopholes and ensure a level playing field. A closer look at the same subject appears in Morocco's Olive Oil Invasion Shakes Spain's Market Dominance. Anyone following the wider picture can start with New Season Olive Oil: Why Fresh Harvest Tastes Better. The same theme surfaces in Microsnobbery Trends: Why Your Olive Oil Story Matters, which takes a different angle.
In the meantime, small producers are left to bear the brunt of a crisis they didn't create. As one COAG representative put it, 'The bill won't be paid by the large groups, but by the small producers.' Context on how this played out before sits in Rosquilletas: Crunchy Spanish Bread Sticks with Olive Oil (61). A companion piece, Microsnobbery in Food Trends: Why Olive Oil Status Matters, approaches the same subject from another angle.