Italy’s olive oil market faces high costs and renewed volatility

Italy’s olive oil sector is entering 2026 under pressure from rising production costs, renewed market volatility, and tighter margins for growers, while recovering Mediterranean output and import flows reshape price dynamics.

After two years of record-high prices, wholesale quotations have entered a volatile phase. In Spain, the region’s benchmark and leading producer, extra virgin olive oil prices rose by about €0.30 per kilogram within just two weeks in mid-February, reflecting instability across the Mediterranean market.

Italian growers continue to struggle with elevated production costs, including labor, energy, and orchard management, while pressure on origin quotations intensifies. Large retailers’ pricing strategies, which influence roughly 80 percent of the domestic market, further affect farm-level margins. According to Anna Cane, president of Assitol, Italy produces around 300,000 tons of olive oil per year, while domestic demand alone is 550,000 tons, with exports requiring an additional 400,000 tons.

Imports play a critical role for many established brands, which source raw materials from across the Mediterranean to blend oils from different cultivars, ensuring consistent flavor and quality. Investments supported by national and regional programs aim to expand olive-growing areas and improve production capacity to address the sector’s structural deficit.

The decline in Italy’s olive oil output—from 600,000 tons in the 1990s to roughly 250,000 tons in the 2020s—is largely due to climate change, Xylella fastidiosa, aging groves, and limited mechanization. Cane emphasized that addressing climate challenges and plant diseases requires research, innovation, and sourcing flexibility, including from new suppliers.

While the current campaign is considered a recovery after two difficult harvests, domestic debates continue. Coldiretti warned that over 500,000 tons of imported olive oil entered Italy in 2025, suppressing domestic prices. Imports from Tunisia, which rose 40 percent in the first ten months of the year, drew particular attention, with prices averaging €3.50 per kilogram compared to €7 per kilogram for extra virgin olive oil in Bari.

Despite these pressures, Italy maintains a robust monitoring system. Cane highlighted that eight competent authorities, along with the national digital system SIAN, ensure traceability of all olive oil entering and leaving the country. The forthcoming National Olive Plan aims to modernize orchards, introduce resilient varieties, and reinforce sustainability, while strengthening consumer awareness of extra virgin olive oil’s health and cultural value.

Tags: Italy, olive oil