Surging Global Demand for Olive Oil
Global olive oil consumption is projected to reach 3,064,500 tonnes in the 2024/25 crop year, representing a 10.0% increase compared to the previous crop year. The global olive oil market was valued at USD 19,416.85 million in 2024 and is projected to grow from USD 20,314.68 million in 2025 to USD 30,631.81 million by 2032, exhibiting a CAGR of 6.04%. This surge is particularly notable in non-traditional markets like the United States, where imports reached approximately 362,618 tons in the 2022/23 season, marking a modest 1% year-over-year increase. Demand from North America and Asia is growing steadily, with the U.S. market increasing its olive oil consumption and growing preference for Mediterranean products, presenting opportunities for European producers to expand exports, especially for high-quality, traceable EVOO varieties.
Climate Change Disrupts Olive Oil Production
Drought conditions hit the Mediterranean region, the world’s largest supplier of olive oil, during the winter of 2022/23 resulting in poor olive harvests, with long-lasting, above-average temperatures, warm spells and poor precipitation leading to severe drought conditions. In 2023, Italy’s agricultural output declined by 3.9% due to extreme weather events, with olive oil production suffering from unseasonably cool and humid spring conditions. Production data shows varying impacts: Spain saw +28% increase (854,000 t), Italy +36% (328,500 t), and Portugal +28% (160,900 t), while production in Greece fell by 49% (175,000 t). The drought in the Mediterranean has damaged crops, resulting in limited supplies and increased prices, with the olive oil industry under severe strain that looks set to continue as the effects of climate change intensify.
Economic Pressures and Rising Prices
The price of olive oil shot up over the last two years, with market insight firm Y Charts reporting a record high of 10281.37 USD per metric tonne in January 2024. Between January and September of 2024, the prices of extra virgin olive oil increased by more than 30% in both Italy and Spain, compared to the same period in 2023, adding to the significant increase from the previous year when prices reached record figures. In Europe, olive oil prices have risen by approximately 75% since January 2021, placing financial strain on consumers and leading to reduced consumption in some regions. A study from the National Bank of Greece found that record olive oil prices were responsible for almost 50 percent of the increase in total food inflation.
Fraudulent Practices Undermine Market Integrity
The olive oil industry has faced challenges with fraud, including mislabeling and adulteration. In December 2023, authorities in Spain and Italy seized over 260,000 liters of counterfeit olive oil deemed unfit for consumption, highlighting the need for stricter regulations and quality control measures. Squeezed supplies and higher prices have triggered a spate of olive oil fraud across Europe in recent months, with a knock-on impact on producers and consumers. Sustainability certifications and origin designations (such as PDO and PGI) continue to play a crucial role in export success, with many international buyers prioritizing these certifications to ensure product authenticity and compliance with regulatory standards, requiring European producers to invest in traceability systems and transparent supply chains.
Trade Policies and Tariffs Affect Supply Chains
Trade tensions have also influenced the olive oil market. In April 2025, Spanish producers considered investing in the U.S. market and expedited exports to avoid new tariffs imposed by the U.S. administration, which introduced a 10% tariff on Spanish olive oil, with a potential increase to 25% within 90 days. With American President Donald Trump announcing a reciprocal tariff system for global trade with the U.S., the international olive oil industry is expected to be hit hard if the tariffs come into the act, which is paused for 3 months as of April 2025. According to Food Navigator and European Commission data, American businesses spent an additional €1.5 billion on European food imports year-on-year between January and July 2024, with EU olive and olive oil sales alone increasing by nearly two-thirds, totaling €1.7 billion compared to 2023.
Emerging Producers Enter the Market
Turkey is positioned to be the world’s second largest producer in the 2024/25 season, with 340,000 tonnes, surpassing Tunisia and becoming one of the world’s main producers with an upward trend, with production increasing by 61.9% and by 130,000 tonnes compared to last season. Turkey’s olive oil exports grew by over 80% in the 2022-2023 season, filling supply gaps left by European shortfalls and offering competitive pricing to international markets. Tunisia is positioned as third place, the main supplier to the EU market thanks to its trade agreement on Inward Processing Traffic (IPT), with the Maghreb country projected to obtain some 315,000 tonnes of olive oil, 57.5 percent and 115,000 tonnes more than the previous season. All EU countries except Italy are showing growth compared to the previous year, while countries such as Tunisia and Turkey project record harvests in 2024/25 and are making a decisive contribution to global production.
Technological Advancements in Production
Advancements in agricultural technology have led to the rise of “super intensive” olive farms. These large-scale operations, utilizing irrigation and mechanized harvesting, have achieved higher productivity and lower costs compared to traditional farms, accounting for 7% of Spain’s olive land and 11% of its production. The EU foresees a slight increase of 1.2% in Spain and 1% in Portugal’s olive farming output for the next decade, thanks to new super-intensive plantations. The European Commission forecasts a 31% increase in EU olive oil production for the 2024/2025 season, reaching 2 million metric tons, which is 9% above the five-year average, with Spain expected to see a 48% rise in output, totaling 1.26 million tons, attributed to favorable spring rains. Modern farming techniques are helping producers adapt to climate challenges while maintaining quality standards.
Consumer Preferences Shift Towards Quality
Despite rising prices, there is a growing consumer preference for high-quality, extra virgin olive oil. In Italy, domestic sales of extra virgin olive oil produced in the country increased by 8% in the first two months of 2024, indicating a willingness to pay a premium for quality products. The industry is witnessing robust growth for infused oil due to the rising need for functional foods and consumer inclination toward premium culinary ingredients, with home cooks and chefs highly utilizing flavor-infused olive oil such as garlic-infused, rosemary-infused, and lemon-flavored varieties to elevate their food palates. Growing awareness of the health benefits of olive fruit oil is the key factor driving the market, with major factors driving product adoption being the rising awareness of the health benefits of monounsaturated fatty acids and the growing popularity of exotic cuisines. Despite rising prices and lower availability, 48 percent of Italian households continue to purchase as much olive oil as they did in previous years.
Future Outlook and Market Adaptations
World production for the 2024/25 crop year could reach 3,375,500 tonnes, an increase of 32% on the previous year, with provisional figures for the 2023/24 crop year showing a 7% fall in production to 2,564,000 t. The global olive oil market is projected to reach USD 21.2 billion by 2033, driven by the increasing popularity of plant-based diets and health-conscious consumers. The European Commission projects a 7% increase in EU olive oil consumption in the 2024/2025 season, following a 22% decline over the past two years. Prices remain stable as the market awaits the first production forecasts for the 2025/2026 crop year, with the Harmonised Index of Consumer Prices (HICP) for olive oil in the EU-27 falling by 26% year-on-year in May 2025, further deepening the downward trend that began in April 2024. Producers are adapting by investing in sustainable practices and expanding into emerging markets to meet the growing demand.
