Olive Oil: Diversifying Sourcing Against Climate Risk

Two seasons are enough to flip a market. In 2022-2023, Spanish drought cut world olive oil output and roughly doubled prices within months; by 2025-2026, abundance did the opposite. A buyer who builds a sourcing plan on a single origin lives through that swing as a spectator, not a decision-maker. Here is why origin diversification has become a genuine risk-management discipline, and how to build it in practice.

A world supply concentrated in a handful of basins

World olive oil production sits almost entirely inside the Mediterranean basin, and most of that basin sits inside five countries. Spain, Italy, Greece, Tunisia and Turkey together account for the large majority of the volumes tracked campaign after campaign by the International Olive Council (IOC) — a geographic concentration no other major vegetable oil shares, since soybean, sunflower and rapeseed are all grown across several continents with weather cycles that are not correlated with each other.

That concentration has a direct consequence: a single regional climate event — a dry winter in southern Spain, a spring heatwave in Greece — can shift the whole world balance, because it hits the top origin and much of what surrounds it in blending decisions at the same time. A buyer whose volume depends 80-90% on one origin is, whether they frame it that way or not, taking a bet on that single country's weather.

2022-2024: the crisis as proof of concept

The sequence is still recent enough to matter. After a 2021-2022 campaign near 3.42 million tonnes, the winter drought that hit Andalusia dragged world production down to roughly 2.57 million tonnes in 2022-2023 — Spain alone fell to close to half its usual output. The following campaign brought no clean rebound. The result: origin prices roughly doubling to tripling between late 2022 and late 2023, bottling lines running under real supply stress across Europe, and buyers forced to accept quotes they would never have signed off a year earlier, simply for lack of a qualified alternative.

This was not an isolated accident. The Mediterranean is warming roughly 20% faster than the global average, according to research consolidated by the European Forest Institute — a figure that matters directly for a tree whose flowering and fruit set react to fractions of a degree and to spring rainfall. A stressed grove flowers less, sets less fruit, and turns one bad weather event into a production gap the following year.

2025-2026: relief, not a new normal

The 2025-2026 campaign brought a clear rebound — world production the IOC places again around 3 to 3.4 million tonnes, driven by Spain returning to a high output level and by Tunisia's sharp rise to the world's second-largest producer. We break down that campaign in detail, figure by figure, in our note on the Tunisian 2025-2026 harvest.

That relief does not change the underlying mechanics. Greece remains marked by drought on Crete and shows production below trend; Turkey, prone to strong alternate bearing, swings between campaigns by more than 40%. The table below summarizes the recent amplitude, origin by origin.

Origin	2022-2023	2025-2026 (estimate)	Swing
Spain	~660,000 t (historic low)	~1.4 million t	More than double
Italy	~240,000 t	~250,000 t	Still below potential
Greece	~250,000 t	~200,000-220,000 t	Below trend, Cretan drought
Turkey	Sharp alternate bearing	Sharp alternate bearing	Swings above 40% between campaigns
Tunisia	Average campaign	~450,000 t, world no. 2	Sharp rise

IOC estimates and cited trade sources; figures should be confirmed campaign by campaign against official observatories.

A buyer who tracks these swings season after season understands why no single origin, however established, can serve as the sole foundation of a multi-year buying plan.

Three levers for a resilient buying plan

Cap dependence on any one origin. The practice spreading among industrial buyers is to set a threshold — no origin should represent more than a majority share of annual volume — and to qualify at least a second origin in parallel, ready to step in without a spec break if the first one falls short. That requires harmonizing the analytical spec across origins beforehand: the same acidity, peroxide value and K232/K270 thresholds required, the same CoA format readable across suppliers.

Spread commitments over time. A single contract signed in one buying window carries the full risk of that window. Splitting purchases across several months of the campaign, with an early contracted share and a spot share held in reserve, smooths the average price paid and leaves room to react if one origin underdelivers mid-campaign.

Secure the storage logistics. Diversifying origins is pointless if physical stock stays concentrated on a single site with no buffer capacity. A bonded warehouse or call-off stock arrangement, covered in our guide to bonded storage and call-off stock, lets you receive lots from several origins ahead of need without tying up cash in duty and VAT too early.

Tunisia as a volume cushion in a diversification strategy

Within that logic, Tunisia holds a particular position. The country climbed to the world's second-largest producer in the 2025-2026 campaign, with a volume increase no other major origin matched that year. Its internal structure helps too: the Tunisian grove spans zones with very different rainfall regimes — a wetter north dominated by the Chetoui variety, a semi-arid center dominated by Chemlali, an arid south — so a local climate event does not hit the whole country the same way. Our figures on Tunisian production map that geography zone by zone.

Added to an existing Spanish or Italian position, a Tunisian origin therefore brings partial decorrelation and available volume at a price level that stays structurally below the northern-basin origins — a point covered in our guide to what drives bulk Tunisian pricing.

Building your sourcing matrix, step by step

In practice, a diversification plan is built in three moves: list the origins that qualify for the intended use — grade, sensory profile, certification; set a dependence cap and a preferred buying window for each within the campaign; and document one shared spec sheet applicable regardless of origin, so offers get compared on equal specification rather than on different labels. Tracking the harvest estimates the IOC publishes each autumn, alongside the European Commission's market observatory, gives the signals that trigger the arbitrage between origins mid-campaign.

Add a solid origin to your portfolio

Virginia is a trader-packer backed by a network of partner mills across Tunisia — more than 30,000 tonnes accessible per campaign, with every lot traceable back to its originating mill. Systematic tasting, a CoA per lot (acidity, peroxide, K232/K270, polyphenols on request), and independent counter-analysis available at loading: enough to qualify a second or third origin without lowering the bar set by your existing spec sheet. Tell us your diversification needs — grade, volume, timeline — through our quote request, or start by exploring our bulk Tunisian olive oil offer: qualified within 24 business hours, from our Paris and Sfax/Sahel offices.