High Temperatures, Water Stress Lead to Poor Olive Harvest in Chile

Olive oil production in Chile fell 17 percent during a challenging 2026 harvest, to 16,600 metric tons, according to data from the industry association ChileOliva.

The decline continues a trend of production fluctuations over the past six seasons, with yields alternating between 20,000 tons or more and 15,000 to 16,500 tons.

Chile’s planted olive area continues to decline, now standing at approximately 19,700 hectares, down from more than 22,000 in 2018. This is mainly due to water scarcity and climate variability, which make it difficult to develop new projects.– José Manuel Reyes, Commercial Manager, Alonso Olive Oil

ChileOliva data show that average annual production over the past five years was 17,820 tons, down from 21,700 tons in the preceding five-year period.

According to Gabriela Moglia, ChileOliva’s general manager, climatic factors largely drove this year’s decline, with some regions more severely affected than others.

“In northern Chile, significant declines in production were recorded, and climate analysis revealed a medium to low accumulation of winter chill hours,” she told Olive Oil Times. “This condition limited the olive trees’ ability to meet their physiological requirements, a problem that was compounded by the limited availability of irrigation water.”

The lack of chill hours and limited water availability hit Coquimbo hardest, roughly 400 kilometers north of Santiago, which accounts for 16 percent of the country’s olive groves.

“In other areas farther south, in central-southern Chile, the decline was smaller and is attributed to episodes of heat stress during winter and at times when the trees were actively growing,” Moglia added.

Claudio Lovazzano, head of marketing at Chile’s largest olive oil producer, said Olivos del Sur increased production by 28 percent in 2026 despite “challenging weather conditions,” including “very high temperatures in summer and frosts during the harvest.”

Beyond climatic conditions, he attributed lower production in Coquimbo to many of the region’s groves entering an “off-year” in the olive trees’ natural alternate-bearing cycle.

José Manuel Reyes, commercial manager of award-winning Alonso Olive Oil in the O’Higgins region, said the company produced 7.6 percent less oil in 2026 than in 2025.

“The lower fruit load was mainly due to climatic conditions during flowering,” he said. “In addition, after a highly productive 2025 season, we had already expected a year with a lighter crop. What helped us offset the decline was a higher extraction yield: we obtained better-quality fruit with good oil content.”

Reyes said the production decline was somewhat expected following an “exceptional year” in 2025. He attributed the longer-term decline in Chilean production partly to a reduction in the area of productive olive groves.

“Chile’s planted olive area continues to decline, now standing at approximately 19,700 hectares, down from more than 22,000 in 2018,” he said. “This is mainly due to water scarcity and climate variability, which make it difficult to develop new projects.”

Reyes said water scarcity and increasing climate variability remain the most significant challenges facing Chile’s olive oil sector.

“This is compounded by rising production costs, particularly for labor and energy, and a more complex trade environment,” he said. “In this context, I believe efficiency and a focus on quality are key to ensuring Chile remains competitive in the global market.”

Moglia echoed those concerns, identifying climate variability as the principal challenge facing producers.

“The main challenge was maintaining productivity amid climate variability, which directly affected the crop and resulted in fewer kilograms of fruit per hectare,” she said. “To address this, it is essential to monitor temperatures (chill hours, frost and heat stress) and precipitation, implement effective irrigation strategies, and plan harvests based on quality and yield criteria.”

However, not every producer reported a decline. Viera Martínez Vasquez, commercial manager of Hacienda Choromba, said the company, located in the Metropolitan region near Santiago, experienced a “relatively normal” harvest.

“We didn’t experience a decline in production,” she said. “We are projecting lower production for the coming season in some areas, particularly those with lower temperatures, where we expect to harvest somewhat fewer kilograms of olives. But this past season was a good one for us in terms of production.”

Martínez Vasquez agreed that the lack of new olive plantings was contributing to the long-term decline in Chilean olive oil production. However, she said Hacienda Choromba plans to plant another 100 hectares of olive trees by the end of the year.

“We’re going to plant around 100 hectares to bring our total to 700,” she said. “We are expanding, but that’s because we’re removing some walnut trees and replacing them with olive trees.”

Despite the production decline, ChileOliva reported that olive oil exports reached a record high in the first half of 2026, valued at nearly $35 million (€31 million), up 32 percent from the previous year.

While production trends drove some of the increase, Moglia said Chilean olive oil is increasingly recognized as a high-quality product.

The United States and Brazil remained Chile’s main export destinations, accounting for a combined 80 percent of exports by volume and 82 percent by value. Spain ranked third.

“Our main market is Brazil,” Lovazzano said. “There, retail prices for European products fell very quickly in early 2026, but we managed to recover a substantial part of our export volumes in the second half of the year.”

Alonso Olive Oil was also among the companies reporting increased exports this year.

“This year we increased our exports. Our main markets are the United States, Mexico, Japan and Taiwan,” Reyes said. “We are seeing particularly positive growth in all these markets, where consumers increasingly value premium oils with an established international reputation.”

He added that the company has not been affected by the 12.5 percent tariff the United States imposed on Chilean olive oil exports in July.

“So far, we have not seen any impact. Because we operate in the premium segment, our consumers are less price-sensitive,” he said. “Even so, the current situation has prompted us to diversify and reduce our dependence on a single market by strengthening our presence in Europe and Asia. The United States remains a strategic market for us, given our history there and the profile of its consumers.”

Moglia agreed that U.S. tariffs had not significantly affected Chilean olive oil exporters.

“But of course, it is a complex issue for Chilean products, and the government is working to address it,” she said.

Meanwhile, Lovazzano said U.S. tariffs had affected Olivos del Sur’s exports, giving the company a slight advantage over European competitors but putting it at a disadvantage against producers in other countries.

“This gives us an opportunity to compete with Spain, the main supplier of olive oil to the U.S.,” he said. “However, countries such as Tunisia and Morocco have gained greater market penetration thanks to lower tariffs or even zero tariffs.”

“For this reason, although the U.S. remains a very strategic market for us, we are also looking to strengthen our relationships with countries such as Canada,” Lovazzano added.

Martínez Vasquez said the United States is also an important market for Hacienda Choromba, which sells about half its olive oil in bulk to U.S. bottlers.

Although she agreed tariffs were not a major obstacle, she said uncertainty over potential increases or decreases made it harder to structure deals.

Hacienda Choromba sells the other half of its olive oil bottled in Chile, where Martínez Vasquez said a technical recession, following two consecutive quarters of economic contraction, has weighed on consumer spending.

“Everything has become much more expensive, and the cost of living has risen significantly,” Martínez Vasquez said. “Inflation remains a major issue. As a result, olive oil consumption—I’m talking about packaged retail products sold in supermarkets—has declined.”

“As a result, the category has contracted in terms of what consumers are buying off the shelves,” she added. “People’s salaries simply don’t go as far as they used to, so their purchasing power has decreased. And when it comes to buying olive oil, people often think, ‘I’d be better off buying a non-olive oil instead, like canola or sunflower oil, because it’s cheaper.’”