Chile’s olive oil production falls 17% due to heat and water shortages

Chile’s olive oil production fell by 17% year-on-year in 2026 to 16.6 thsd tons. The main reasons were unfavorable weather conditions, high temperatures and a shortage of irrigation water. According to industry association ChileOliva, the country’s production has fluctuated over the past six seasons, ranging from 15–16.5 thsd tons to more than 20 thsd tons. Average annual production over the past five years stood at 17.82 thsd tons, compared with 21.7 thsd tons in the preceding five-year period.

Northern regions were the hardest hit by adverse weather conditions, particularly Coquimbo, which accounts for around 16% of Chile’s olive groves. Insufficient winter chilling hours disrupted the normal development of olive trees, while limited irrigation water further reduced their productivity. The decline in production was less pronounced in central and southern regions, although high temperatures and heat stress also negatively affected yields. Meanwhile, some producers managed to increase olive oil output despite challenging weather conditions.

A gradual reduction in olive-growing areas remains another factor contributing to lower production. According to industry estimates, Chile’s olive groves now cover approximately 19.7 thsd ha, down from more than 22 thsd ha in 2018. Water scarcity, climate variability and rising production costs, particularly for labor and energy, are constraining plantation expansion. These factors continue to limit investment in new olive groves.

Despite the decline in domestic production, Chile’s olive oil exports reached a record of nearly $35 mln in the first half of 2026, up 32% compared with the same period last year. The United States and Brazil remain the main export destinations, together accounting for around 80% of export volumes and 82% of export value. Spain ranks third among importers. Meanwhile, Chilean producers continue to expand their presence in Mexico, Japan, Taiwan and other markets.

The industry’s future prospects will largely depend on water availability, weather conditions and producers’ ability to adapt cultivation practices to climate change. ChileOliva representatives emphasize the need for more efficient irrigation, better management of temperature-related risks and optimized harvest timing. At the same time, producers are increasingly focusing on olive oil quality and export diversification to maintain their competitiveness in international markets.

Tags: Chile, olive oil, weather conditions