Conflict and inflation increase pressure on Iran’s olive oil producers

Iranian olive oil producers are entering the new harvest season amid high inflation, weak domestic demand and uncertainty caused by the conflict with the United States and Israel. After hostilities began, olive oil sales virtually stopped for several weeks and have since recovered only gradually.

One of the industry’s main challenges is the sharp decline in consumer purchasing power. According to local producers, annual inflation rose from 53% in December to nearly 89% by the end of June, prompting consumers to cut spending on more expensive products, including olive oil. At the same time, higher product prices have partially offset the decline in sales volumes for producers.

The weakening Iranian rial has also provided some support for domestic products. Imported olive oil, particularly from Turkey, has become significantly more expensive, prompting some consumers who previously bought Turkish products to switch to Iranian alternatives. However, high inflation is also raising production costs, including labor expenses ahead of the olive harvest.

Another factor affecting the 2026/27 season is unusually hot weather during spring and summer, which accelerated fruit ripening. As a result, the olive harvest could begin in early September, several weeks earlier than last year. Producers currently describe crop prospects as average, with neither a major decline nor a particularly strong harvest expected.

According to preliminary data from the International Olive Council, Iran produced 11.5 thsd tons of olive oil in 2025/26, compared with an average of 10.7 thsd tons over the previous three seasons. Despite uncertainty over the conflict, producers are continuing preparations for the new harvest, as further delays to production plans could result in additional losses.

Tags: Iran, olive oil