In recent times, the price of olive oil has been increasing significantly, causing concern among consumers and producers. One of the main reasons for this climb has been the prolonged drought that affected some of the largest producing regions, such as Andalusia, in Spain, and Alentejo in Portugal. Lack of water dramatically reduced olive production, leading to a lower supply on the market and, consequently, to increased prices.
Precipitation levels recorded in recent months have brought some hope to the agricultural sector. According to the WEEKLY ALBUFASTA DA BULLETIN, published March 10, 2025, 69% of monitored dams now have water availability greater than 80% of their total capacity. This increase in water storage may have positive effects on the next olive campaign.
Perspectives for olive oil production
In some regions, producers believe that improving water conditions may allow an increase in oil production next year. If water availability continues to improve, olive trees will be better able to grow and produce higher quality and quantity fruits. However, experts warn that the impacts of previous droughts can still affect the 2025 harvest.
Predictions for the descent of the price of olive oil
Predictions for the evolution of oil prices are cautiously optimistic. According to Jornal de Negócios, prices can lower in 2025, reflecting a gradual recovery of production. Despite this possible descent, the values practiced may continue above the average registered before the severe droughts.
The impact for consumers
Consumers expect production stabilization to bring relief to their budgets. By 2024, oil prices reached record values, leading many consumers to reduce consumption or look for alternatives. If prices go down, even moderately, it will be a relief for many families and companies in the food sector.
Other factors that influence the price
However, the recovery of the sector does not only depend on the amount of water stored in the dams. Factors such as energy costs, fertilizers and transportation also play a key role in forming final prices. If these costs remain high, the descent of the price of olive oil may be slower than expected.
Climate instability remains a risk
Climate instability remains a risk factor. Although the water situation has improved, there is no guarantee that favorable conditions are maintained over the coming years. The agricultural sector faces constant challenges due to extreme meteorological phenomena, such as heavy rainfall or prolonged heat waves, which can compromise olive production.
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The influence of the international market
International market dependence also influences the evolution of olive oil prices. Spain, being the world’s largest producer, has a direct impact on the values practiced globally. If Spanish production recovers quickly, the market can adjust and prices will tend to go down. Otherwise, the scarcity will continue to press the values upwards.
Producers strategies to minimize risks
Producers have been looking for alternatives to minimize drought impacts. Investments in more efficient watering techniques and olive varieties more resistant to water lack are some of the study solutions. Adapting to new climate realities will be essential to ensure the sustainability of the sector.
THE ROLE OF PUBLIC POLICIES
In addition to the individual measures of producers, it is essential that there are public policies to support agriculture. Incentives to modernize irrigation systems, support for water capture and storage projects and oliviculture -specific credit lines are some of the initiatives that can make a difference.
The quality of Portuguese olive oil
The quality of Portuguese olive oil continues to be recognized internationally. Despite challenges, producers maintain a high quality standard, which can contribute to maintaining stable demand even at higher prices. This appreciation of the national product may be a positive factor in the recovery of the sector.
How consumers can adapt
Consumers can also adopt strategies to deal with price volatility. Taking advantage of promotions, choosing higher volume packaging and diversifying the brands bought are some of the ways to minimize the impact on the family budget. Education on the conscious and sustainable consumption of olive oil can help balance demand and supply.
What to expect in the coming months
The future of the price of olive oil will depend on a combination of factors. If weather conditions continue to improve and production costs stabilize, there may be a descent of prices in the coming months. However, market unpredictability and variations in international production will continue to play a fundamental role in the evolution of values practiced.
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