Italy Faces Smaller Olive Oil Harvest Amid Falling Prices, Rising Stocks

Italian olive oil production is expected to fall by about 20 percent in the 2026/27 crop year, to between 270,000 and 290,000 metric tons, as lower output in the South is only partly offset by a rebound in central and northern regions.

There is some fear in the countryside now. Growers have to face the costs of harvesting, and we have to hope that prices remain remunerative for them.– Massimo Ragno, Monini

“Our survey across the Italian regions indicates national production could be approximately 20 percent below the crop year that just finished,” Massimo Ragno, panel leader and purchasing manager at Monini, told Olive Oil Times.

“A truly scientific picture would require a nationwide network of test groves and continuous monitoring, but it would not be economically feasible,” he added. “Estimates come from field surveys and close contacts with growers and millers across the different regions.”

In southern Italy, Puglia, the country’s largest olive oil-producing region, is expected to produce between 130,000 and 140,000 tons. “Its potential is much higher, around 210,000 tons, but it was a very hot summer that lasted from the end of May through the first half of September,” Ragno said.

“Those who had access to irrigation are in a considerably better situation than rainfed groves,” he added, citing the high costs of water and energy. “As the costs are very high, there are growers who chose to irrigate less than agronomic conditions would have suggested.”

Sicily and Calabria are also expected to produce less than in the previous crop year.

“Last year Sicily’s olive crop — not olive oil output — was somewhere between 400,000 and 450,000 tons; this year we expect around 350,000 tons, with 320,000 to 330,000 tons of olives in Calabria,” Ragno said.

“You cannot see the olive oil inside the olives with your bare eyes,” he joked, noting that olive tonnage does not directly translate into oil output.

After a promising flowering season this spring, prolonged heat reduced the number and size of the fruit. However, the high temperatures also helped keep fungal diseases and the olive fruit fly at bay.

“We are not seeing them almost anywhere and the olives are very healthy,” Ragno said. Early tastings have also been promising. “There definitely is the potential for a very high-quality olive oil production.”

Central and northern regions are expected to rebound from last year’s crop. “For most of those regions, last year was an off-year, and this season we are instead seeing lots of fruit on the trees,” Ragno said, referring to the olive tree’s natural alternate-bearing cycle.

The stronger performance should partly compensate for the decline in the South, leaving natoduction below last year’s level but likely higher than some of the earliest forecasts.

Italy is entering the 2026/27 crop year with substantial volumes of olive oil volumes still in storage. At the end of July, stocks stood at about 233,000 tons, up from 162,000 tons a year earlier, an increase of more than 40 percent.

“I think we could arrive in November with 70,000 to 100,000 tons of Italian olive oil still in stock, probably somewhere around 80,000 or 90,000 tons,” Ragno said. “If the new production is going to be somewhere between 270,000 and 290,000 tons, that is still an important amount of oil.”

Ragno attributed the stock buildup partly to the unusually wide price gap that emerged during the previous crop year between Italian olive oil and oil produced elsewhere in the European Union.

“There was a moment when European olive oil had dropped to around €4 to €4.50 per kilogram, while Italian oil was still between €7 and €8,” he said. “That difference became too large and made it difficult for many operators to sell Italian olive oil.”

Ragno stressed that maintaining a premium for Italian olive oil remains essential to reward quality and sustain growers. However, he warned that an excessive price difference compared with competing origins can weaken demand.

“We have always supported a policy based on value because only value and quality can protect the product,” he said. “But when the difference becomes excessive compared with what is happening on the international market, problems can arise. We have seen a contraction in consumption of Italian olive oil for some time, which has only recently begun to ease as prices have fallen.”

The price correction has been substantial. According to Ismea, Italy’s institute for agricultural and food market services, average extra virgin olive oil prices at origin fell to €4.86 per kilogram in August, 49.3 percent below the same month in 2025. By the third week of September, Ismea reported Spanish extra virgin olive oil prices at €3.67 per kilogram.

The decline has created mounting difficulties for growers and millers as harvest approaches. “There is some fear in the countryside now,” Ragno said. “Growers have to face the costs of harvesting, and we have to hope that prices remain remunerative for them.”

“If olives have a good yield, operators can pay more for them and compensate the work of the growers,” he added. “But if yields are low and the resulting olive oil costs €7 or €8 per kilogram while European oil is trading much lower, then it becomes difficult.”

Italian millers’ associations AIFO and AFP recently warned that significant quantities of unsold olive oil are tying up working capital in Puglia, reducing the liquidity available to mills as the new harvest begins.

The associations called on regional authorities to let mills use the value of their olive oil stocks under the Puglia Moltiplica program’s Short Term Facility to obtain short-term financing.

They warned that insufficient liquidity could limit mills’ ability to buy olives during the harvest and pay farmers on time.

Against this backdrop, the Italian government has asked the European Commission to activate the E.U.’s Agricultural Reserve, citing persistent downward pressure on producer prices, rising stocks and high production costs.

The government has also announced the Documento di Accompagnamento Elettronico Olivicolo, or DAO, a new digital tracking document designed to integrate with the SIAN system and the Olive Oil Telematic Register.

The measure aims to strengthen traceability and tighten controls on the movement of olives and olive oil. It would also shorten the deadline for recording operations from six to three days and is expected to become operational in the 2027/28 crop year.

Orgoglio Olivicolo, a committee of growers and millers campaigning for stronger support measures, welcomed the initiative as a step forward but said it would continue demonstrations and other efforts to secure greater public support for the sector.

With harvesting beginning in several areas, final production figures could still change, particularly if cooler temperatures and rainfall improve fruit size before picking.

“We need some cooler weather and some rain,” Ragno said. “If conditions remain favorable, there is the possibility of harvesting and producing very good oils.”