Heat, Drought and Rising Costs Drive Down Portugal’s Olive Harvest

Summary

Olive pro­duc­tion in Portugal is expected to decline by 20 per­cent in the 2025/26 crop year due to weather con­di­tions, with the south­ern Alentejo and north­ern Trás-os-Montes regions being par­tic­u­larly affected. Despite lower yields, good fruit qual­ity and reg­u­lar ripen­ing are expected, but pro­duc­ers are fac­ing chal­lenges such as ris­ing costs and low olive prices, lead­ing to con­cerns among tra­di­tional pro­duc­ers and calls for gov­ern­ment inter­ven­tion to ensure fair pay­ment.

Olive pro­duc­tion in Portugal is expected to decline by 20 per­cent in the 2025/26 crop year, accord­ing to data from the National Institute of Statistics (INE).

INE esti­mates that olive grove pro­duc­tiv­ity will reach 2,801 kilo­grams per hectare in 2025/26, down from 3,501 kilo­grams per hectare in the pre­vi­ous sea­son and slightly below the five-year aver­age.

The insti­tute said high tem­per­a­tures and strong spring winds caused flower drop and irreg­u­lar fruit set in the south­ern Alentejo region, which accounts for most of the country’s olive oil pro­duc­tion. In the north­ern Trás-os-Montes region, wet and cold weather also hin­dered fruit set.

“Subsequently, high tem­per­a­tures and the absence of sum­mer rain­fall ham­pered olive devel­op­ment, a sit­u­a­tion aggra­vated in the Trás-os-Montes region by fires that destroyed sig­nif­i­cant areas of tra­di­tional olive groves,” INE wrote.

Despite the lower yields, the insti­tute said har­vest­ing con­firmed good fruit qual­ity and reg­u­lar ripen­ing, with expec­ta­tions of pro­duc­ing good-qual­ity olive oils.

The INE assess­ment aligns with ear­lier fore­casts from the national pro­ducer asso­ci­a­tion Olivum, which antic­i­pated a 20 per­cent decline in olive out­put and a ten per­cent drop in olive oil pro­duc­tion.

“During the cru­cial months for olive oil pro­duc­tion, we have encoun­tered an extremely dry sit­u­a­tion,” said Susana Sassetti, Olivum’s exec­u­tive direc­tor. ​“Compared to the pre­vi­ous sea­son, many olive groves have not been able to main­tain nor­mal fruit devel­op­ment.”

She added that the sec­tor is fac­ing a highly uneven har­vest across regions and vari­eties, with an over­all trend toward reduced pro­duc­tion.

According to European Commission data, Portugal pro­duced 21,300 met­ric tons of olive oil in the first month of the 2025/26 sea­son and is expected to fin­ish the crop year with total out­put of about 150,000 met­ric tons.

This would fall well below ini­tial fore­casts of 170,000 to 180,000 tons made in September, as well as the 177,000 met­ric tons pro­duced in the pre­vi­ous crop year.

The pro­duc­tion decline comes amid ris­ing labor, fer­til­izer, fuel, and pes­ti­cide costs, as well as another year of low olive prices for farm­ers.

Portugal’s National Agricultural Confederation (CNA) described the sit­u­a­tion as a ​“cause for great con­cern” for tra­di­tional pro­duc­ers, not­ing that olive prices have fallen to €0.55 per kilo­gram, down from €0.75 in 2024 and €1.10 in 2022.

“Besides the inex­plic­a­ble drop in prices in a year of lower pro­duc­tion, many pro­duc­ers are deliv­er­ing their olives to the mills with­out know­ing how much and when they will receive pay­ment,” the CNA said, adding that some farm­ers have been told pay­ments may not arrive until September next year.

The con­fed­er­a­tion also pointed to higher milling costs, includ­ing a tem­po­rary increase in value-added tax on milling ser­vices from six to 23 per­cent. The rate is expected to return to six per­cent in January 2026.

The CNA has urged the Portuguese gov­ern­ment to guar­an­tee ​“decent incomes for farm­ers” by adopt­ing leg­is­la­tion pro­hibit­ing pro­duc­ers from being paid below their pro­duc­tion costs and by estab­lish­ing a mech­a­nism to enforce com­pli­ance.