Italian Olive Oil Crisis: Farmers Warn Entire Chain at Risk as Warehouses Overflow

Italian olive oil producers have issued an urgent warning that the upcoming harvest campaign is in jeopardy, with storage facilities still overflowing with unsold stock from the previous season. In a strongly worded letter to Agriculture Minister Francesco Lollobrigida, industry associations are demanding immediate crisis talks, as reported by the Italian financial daily Il Sole 24 Ore.

What Is Behind the Italian Olive Oil Crisis?

The crisis stems from a severe market imbalance that unfolded during the 2025/2026 campaign. Olive mills purchased raw olives at exceptionally high prices early in the season, only to see market prices subsequently collapse below their production costs. As a result, many producers were forced to either hold onto their stock in the hope of a price recovery or sell at steep losses. The situation has been exacerbated by surging energy and transport costs, which have further squeezed already thin margins.

According to data from the Certified Origins April 2026 Market Report, Italian olive oil stocks jumped 42.9% year-on-year to approximately 304,393 tonnes, while domestic consumption and exports failed to absorb the surplus. This overhang has left mills without the liquidity needed to purchase and pay for the new harvest within regulatory timeframes.

Entire Supply Chain in Danger, Warns Industry Chief

Alberto Amoroso, president of the Italian Association of Olive Oil Mills (A.I.F.O.), painted a stark picture of the consequences if mills are forced to shut down. "If the mills come to a standstill, olive growers will be left without a market for their harvest and the stability of the entire Italian olive oil supply chain will be jeopardised," Amoroso told Il Sole 24 Ore. He stressed that the crisis affects not only processing companies but the entire ecosystem of growers, workers, and the productive future of Italy's olive-growing regions.

Gregor Christiaans, chairman of the Stichting Olijfolie Nederland (Dutch Olive Oil Foundation), described the situation as "recognisable." "Stocks are high and significantly above last year's levels," he said, while also noting that Italy imports, stores and trades large volumes of olive oil beyond its own production. "It's not just about their own output."

The sector's frustration is compounded by its exclusion from crucial policy discussions. A.I.F.O. revealed that olive oil producers were not invited to a key meeting at the Ministry of Agriculture last month, nor have they been included in regional talks about future support measures and subsidy schemes. "You cannot decide the future of Italian olive oil without listening to those who produce, store and bear the commercial risk," Amoroso said.

Spanish Competition and the Blending Controversy

Italy's domestic struggles are unfolding against a backdrop of intense competition from Spain, the world's largest olive oil exporter. In the first quarter of the 2025/2026 marketing year, more than half of Italy's olive oil imports came from Spain, according to European Commission trade data cited by the Financial Times. Much of this imported oil ultimately ends up on supermarket shelves labelled as Italian olive oil, a longstanding practice that has drawn criticism from domestic producers and consumer groups alike.

Adding to the pressure, Tunisia has now overtaken Italy as the world's second-largest olive oil producer, with output reaching 450,000 tonnes. Tunisian olive oil exports to Europe have surged, offering buyers a cheaper bulk alternative and further undercutting Italian producers.

Proposed Solutions: Loan Moratoriums and Government Intervention

A.I.F.O. is pushing for concrete measures ahead of the new harvest. Among the proposals is a loan repayment moratorium, to be negotiated with the Italian Banking Association (ABI), that would give struggling producers breathing room. The association also wants a dedicated crisis meeting with Minister Lollobrigida and regional agriculture assessors to coordinate an emergency response.

Meanwhile, Italy's Ministry of Agriculture (MASAF) recently introduced a circular that tightens labelling rules for blended oils, prohibiting products containing virgin olive oil from being labelled as extra virgin — a move that could help protect the premium reputation of Italian EVOO but has sparked legal debate within the industry.

As the Mediterranean grapples with the broader climate impact on European agriculture, the fate of Italy's olive oil sector hangs in the balance. With warehouses still full and prices under pressure, the coming weeks will be critical in determining whether the country's storied olive oil tradition can weather this perfect storm.

Frequently Asked Questions

Why are Italian olive oil producers in crisis?

Italian olive mills purchased olives at high prices during the 2025/2026 campaign, but market prices subsequently fell below their costs. Rising energy and transport expenses worsened the situation, leaving warehouses full of unsold oil and mills without liquidity to buy the new harvest.

How much olive oil does Italy import from Spain?

In the first quarter of the 2025/2026 marketing year, over 50% of Italy's olive oil imports came from Spain, according to European Commission trade data. Some of this imported oil is later labelled and sold as Italian olive oil.

What is A.I.F.O. demanding from the Italian government?

The Italian Association of Olive Oil Mills (A.I.F.O.) is calling for an immediate crisis meeting with Agriculture Minister Francesco Lollobrigida, a loan repayment moratorium negotiated with the Italian Banking Association, and inclusion in all future policy discussions affecting the sector.

How have climate conditions affected olive oil production in 2026?

Persistent drought and heatwaves across the Mediterranean have stressed olive trees, reducing yields and oil quality. However, early 2026 rainfall improved conditions in some Spanish growing regions, while Italian production remains structurally insufficient to meet domestic demand.

Is Italy still the world's second-largest olive oil producer?

No. Tunisia has surpassed both Italy and Greece to become the world's second-largest olive oil producer, with an output of 450,000 tonnes in the latest season. Italy now ranks third or fourth depending on the harvest year, behind Spain and Tunisia.