Price of olive oil expected to rise again as European crops feel the heat

by | Aug 4, 2026 | Business

Price of olive oil expected to rise again as European crops feel the heat

Farmers throughout Europe are reporting substantial losses in agricultural output as extreme heat, drought conditions, and wildfires devastate crops ranging from vegetables to grains. Industry organizations and agricultural bodies have documented the scale of the damage, with thousands of tonnes of produce lost and millions of euros in estimated damages.

Vegetable production has been particularly affected, with crops including salad leaves, carrots, leeks, garlic, and onions experiencing significant declines. Spain’s agricultural ministry forecasts cereal production will drop from 24 million tonnes to approximately 18.5 million tonnes for the coming season. Wine regions across France, including Champagne, Bordeaux, and Burgundy, are facing reduced grape yields and record-early harvests due to heat stress on vines. The European Union has adjusted harvest predictions downward across multiple commodity categories, with sunflower production down 7 percent, grain maize down 6 percent, and potatoes and soya beans trimmed by 3 percent.

Olive oil prices are anticipated to increase as production faces mounting pressure from heat stress, drought, and fire damage in major producing regions. Groves have experienced fires in Greece, Italy, and Portugal, while surviving trees face complications from ash exposure, pest outbreaks, and disease. Industry experts note that extreme temperatures have reduced fruit size and prompted crop shedding in drought-affected areas. Prices for extra virgin olive oil in retail markets have begun climbing in recent months after declining from earlier peaks.

While certain regions have experienced more favorable conditions, the overall European agricultural outlook remains challenging. Romania benefited from adequate rainfall, and Italy’s wheat production has proven resilient, with forecasts showing a 10 percent increase in output suited for baking applications. Importers report increased reliance on Mediterranean suppliers for staple vegetables as domestic production declines, with water availability and irrigation management emerging as critical factors influencing yields going forward.

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