Italy’s Olive Oil Industry Shifts from Production Giant to Global Trade Hub

Two decades of data from the Italian National Institute of Statistics (ISTAT) show how Italy’s olive oil sector has gradually shifted from a production powerhouse toward a global commercial hub.

According to ISTAT, olive oil production fell from 603 million liters in 2006 to 379 million liters in 2025, a 38 percent decline.

Over the same period, imports rose 44 percent, from 392 million liters to 565 million liters. Exports followed a similar trajectory, increasing 43 percent from 209 million liters to 298 million liters.

By 2025, only 81 million liters of Italian-produced olive oil were destined for the domestic market, down 79 percent from 394 million liters in 2006.

ISTAT said the shift reflects two parallel trends: Italy increasingly relies on imported olive oil to meet domestic demand while exporting a growing share of its own production. In 2025, exports accounted for nearly 79 percent of national production.

The period also coincides with a significant tightening of European olive oil traceability and origin-labeling rules. Since 2009, extra virgin and virgin olive oils sold in the European Union have been required to identify their geographical origin after regulators concluded that the previous voluntary system was insufficient to prevent consumer confusion. The rules also established clearer labeling for blends of oils originating in multiple E.U. member states or third countries.

Production declined even as Italy retained nearly all of its olive-growing area. Between 2006 and 2025, olive production fell 27.2 percent while cultivated area declined by just 1.4 percent. Average yields dropped 26.1 percent, from 30.7 to 22.7 quintals per hectare.

ISTAT attributed the decline in output and productivity to worsening structural conditions in olive farming, including climatic, phytosanitary and management pressures.

The long-term decline has not ruled out occasional recoveries. In 2025, more favorable growing conditions, particularly in southern Italy, lifted olive oil production by 9.6 percent from the previous year. Production value rose 5.9 percent despite a 3.4 percent price decline.

The ISTAT analysis comes shortly after the formal adoption of Italy’s 2026–2030 Olive Oil Plan, developed by the government in consultation with the main associations and federations representing producers, growers and millers.

The plan aims to reverse the decline in production, curb grove abandonment, modernize orchards and reduce production costs. Agriculture Undersecretary Patrizio La Pietra said years of fragmented production, climate pressure and insufficient planning had “progressively eroded the sector’s productive potential.”

As the new harvest season approaches, attention is also turning to the volumes of olive oil currently stored across the country. Amid weak sales and complex price and trade dynamics in domestic and European markets, inventories remain high.

In recent weeks, producer and miller organizations have warned that large stocks of unsold oil could complicate the start of the new harvest. Some mills are approaching the campaign with storage tanks still full, while growers question whether harvesting will generate enough revenue to cover production costs.

As Italy’s role in the global olive oil trade expands, the sector is also becoming increasingly sensitive to fluctuations in its main export markets.

The United States is particularly important. It remains the leading destination for European Union olive oil exports and, according to E.U. data, accounted for 38 percent of their value in 2025. Any sustained weakening in U.S. demand can therefore quickly affect Italian export volumes, inventories and domestic market conditions.