Focus on olive oil in the 2025/26 marketing year

Di Yang. Economist Markets and Trade Division Food and Agriculture Organization of the United Nations (FAO)

A featured article in the November 2025 edition of Food Outlook provided an in-depth analysis of global olive oil production and examined the prevailing conditions at that time.

The current edition presents a market update and forecasts for the 2025/26 season, with international olive oil prices having declined significantly after reaching historic highs in early 2024.

Following a strong recovery in global olive oil production during the previous 2024/25 marketing season (October–September), international prices dropped markedly from the peak reached in early 2024.

In Spain, the world’s leading olive oil producer, wholesale prices for extra virgin olive oil (cold-pressed from the fruit, without chemical or thermal treatment) fell sharply from nearly €9,000 (USD 10,440) per tonne in January 2024 to €4,180 (USD 4,849) per tonne in September 2025, representing 13.9% below the average of the past five years.

Similarly, extra virgin olive oil (EVOO) prices in Greece also declined almost continuously from a historic high of €8,460 (USD 9,814) per tonne in January 2024 to €4,100 (USD 4,756) per tonne by the end of the 2024/25 season.

However, an exception was observed in Italy, one of the world’s main olive oil producers.

Unlike the production recovery seen in other major producing countries in the Mediterranean Basin, Italy’s 2024/25 harvest was severely affected by a prolonged drought lasting from June to August 2024, which hindered fruit development, especially in southern producing regions.

As a result, the national olive harvest declined by nearly 25% compared to the previous season.

Reflecting the lack of production recovery, Italian extra virgin olive oil prices remained high and, unlike prices in Greece and Spain, reached historic highs in mid-2025.

At over €9,500 (USD 11,020) per tonne in September 2025, quotations were 40.6% above the average of the past five years.
 
 
 

2025/26 Season

Global olive oil production in 2025/26, which began on 1 October 2025, is expected to remain above the average of the past five years.

As the 2025/26 harvest has progressed, preliminary forecasts indicate stable global olive oil production at around 3.4 million tonnes, slightly below the estimated level of the previous season.

Production in Spain is slightly below last year’s level, but is still expected to account for around 40% of global output.

While beneficial rainfall between March and May 2025 in the main producing regions supported crop development during the flowering and pollination stages, excessive heat and drought since June 2025 have weakened yield prospects.

Naturally, weather conditions in the coming months will remain crucial in determining the final outcome of the harvest.

On the southern Mediterranean coast, Tunisia is expected to achieve a record crop, thanks to abundant rainfall throughout the growing season.

With more than 400,000 tonnes, the forecast could position Tunisia as the world’s second-largest olive oil producer in 2025/26, accounting for 13% of global production.

Meanwhile, production in Italy is expected to recover from the drought-reduced harvest of the previous season, largely due to favorable conditions in the country’s southern regions.

By contrast, olive oil production in Greece is expected to decline compared to the previous year.

In addition to the natural phenomenon of alternate bearing in olive trees—where a high-yield season is typically followed by a low-yield one—the harvest has also been negatively affected by prolonged drought in some areas of the main producing regions.

Similarly, production in Turkey is also expected to decrease compared to the record crop recorded in the previous season.

Rising Consumption and Trade

Global consumption and trade of olive oil are expected to increase in 2025/26.

Consumers have faced high olive oil prices since late 2022, as prolonged droughts reduced global production—especially in Spain—over two consecutive seasons.

However, as benchmark prices in major exporting countries began to trend downward in 2024 and then fell sharply amid improved global supply, global olive oil consumption is expected to continue recovering.

Consumption had already shown a gradual recovery from early 2025 in response to more affordable prices. Nevertheless, as the 2025/26 season begins with relatively low opening stocks, global consumption is unlikely to fully recover to the record level seen before 2022/23.

In line with the expected recovery in consumption, global olive oil trade is projected to rise to over 1.3 million tonnes, potentially reaching a historic high.

The European Union is expected to remain the world’s leading exporter, largely due to ample export availability in Spain, although higher import tariffs imposed by the United States of America could constrain trade volumes.

Meanwhile, preliminary forecasts of a record crop in Tunisia could boost the country’s share in global olive oil trade.

Conversely, the lower expected production in Turkey—traditionally one of the leading olive oil exporters—is likely to limit its export capacity in 2025/26.

On the import side, lower prices are expected to increase purchases in major markets, including Brazil, China, the European Union, and the United States of America.

Key Challenges

At the same time, the challenges facing the olive oil sector remain unchanged.

Although global olive oil production is expected to remain stable in 2025/26, producers continue to face several challenges affecting profitability and the sector’s long-term sustainability.

Irregular weather patterns and prolonged droughts in key producing regions are among the most pressing issues. In addition to reducing yields and compromising oil quality, excessive heat conditions favor the spread of diseases such as Xylella fastidiosa.

Rising production costs also pose a major challenge. As a labor-intensive industry, olive oil production is particularly sensitive to high labor and input costs, making it difficult for small producers to remain profitable.

For exporters, stable trade relations and a predictable business environment are essential for establishing and maintaining relationships with international buyers.

Consistent trade policies and clear regulatory standards not only help exporters develop long-term partnerships with distributors and retailers but also enable them to reduce compliance and transaction costs.

Moreover, effective border control and anti-fraud regulations are especially important for a product like olive oil, whose quality is closely linked to its origin and authenticity.

Consistent product quality will strengthen consumer trust and support stable demand among end users.

References

European Commission. 2025.
Olive Oil and Table Olives Market Observatory. Brussels.

Food and Agriculture Organization of the United Nations. 2025.
FAOSTAT. Rome.

International Olive Council. 2025.
IOC Statistics Dashboard. Madrid.

Ministry of Agriculture, Fisheries and Food. 2025.
Olive Oil. Madrid.

Photos: Di Yang (FAO) cover and inside; IOOC and LinkedIn.