The global olive oil industry is confronting fresh challenges as erratic weather patterns disrupt production cycles and trigger sharp price movements, RaboResearch has cautioned in its latest outlook.
After two years of drought-induced lows, Spain — which accounts for nearly half of global output — posted a strong recovery in 2024-25, producing around 1.4 million tonnes. The rebound, mirrored across Greece, Portugal, Tunisia and Turkey, eased last year’s supply crunch and pulled international prices down from record highs.
“In Spain, which sets global prices, olive oil dropped to EUR 3,200 per tonne in March 2025. In contrast, Italy’s locally-produced extra-virgin olive oil stayed above EUR 9,000 per tonne, the widest premium ever over Spanish grades,” said Vito Martielli, Senior Specialist, Grains and Oilseeds at RaboResearch.
While lower prices have encouraged a pick-up in consumption across southern Europe, renewed demand has already pushed Spanish rates higher in recent months, amid cautious estimates for the 2025-26 season beginning October.
The Mediterranean, responsible for 95 per cent of global olive oil output, is emerging as a climate stress zone. Rising temperatures, irregular rainfall and extreme events are expected to make production cycles increasingly unpredictable. “The real risk is volatility — seasons with strong yields followed by weaker harvests due to weather shocks,” Martielli noted.
According to the report, long-term stability will hinge on adaptive farming practices. Irrigation access, soil and canopy management, pest control and climate-resilient varieties are seen as critical measures. On the demand side, companies can cushion supply shocks by sourcing from multiple regions and working with growers on sustainable production models.
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