Heat, Drought and Innovation: How Portugal Keeps Olive Oil Affordable

Portuguese consumers may notice only a gentle ripple, not a wave, in olive-oil shelves this autumn. Growers expect a campaign broadly in line with last year, even after an unrelenting summer of heat and drought. Yet behind the stable numbers lies a sector racing to future-proof itself, betting on new plantations, precision irrigation and the country’s first sustainability seal.

Why a marginal dip can still influence household spending

The latest forecast from Olivum, which represents roughly 70 % of national output, points to 160,000–170,000 t of olive oil for the 2025/2026 harvest. That is only a single-digit decline from last year’s tally, but the figure matters in a nation where azeite is a staple, not a luxury. Retail prices shadow wholesale supply; even a small shortfall in the vats can push the supermarket litre past the psychological €8 mark that many families already judge painful. Traders in Lisbon’s wholesale markets say they will watch pick-up volumes closely through November before locking in Christmas contracts.

Weather: headline risk turned operational challenge

Producers blame the possible slippage on a run of “very hot and dry” months, capped by 46.6 ºC in the Alentejo. The Portuguese Meteorological Institute ranked 2024 the fourth-warmest year since records began, and it has warned that “extreme events are no longer exceptional.” High temperatures during flowering disrupt fruit set, while scorching harvest days can lift the olive’s internal temperature above the ideal press threshold, shaving both yield and polyphenol quality. Farmers around Beja experimented this year with night-time picking and mobile refrigeration—costly workarounds that may become standard if climate models prove accurate.

Two sets of numbers and a healthy debate

While Olivum speaks of a slight contraction, the Planning and Policies Office, using fresh INE data, projects a 10 % rise to about 177,000 t. The divergence turns on methodology. Olivum surveys only its member mills—21 high-capacity facilities that process an estimated 850 M kg of olives—and factors in daily intake. Government statisticians extrapolate from a broader basket that captures smaller, rain-fed groves. Analysts in Porto note that whichever tally prevails, Portugal is poised to hold its fifth-place slot in the global ranking, behind Spain, Italy, Greece and Turkey.

New groves soften the blow of older trees in stress

The Alqueva irrigation scheme continues to reshape the landscape. Satellite imagery suggests thousands of intensive and super-intensive olivais have reached bearing age since 2023, pushing national average productivity above 2.4 t of olives per hectare—quadruple the figures typical at the turn of the century. The modern blocks offset yield losses in traditional dryland plots buffeted by drought. Agronomists at the University of Évora predict that, barring water-use caps, Portugal could break the 200,000-tonne ceiling before 2030, moving the country toward Olivum’s long-stated ambition of becoming the world’s third-largest producer.

Sustainability seal rolls off the presses in November

A different milestone arrives sooner. After two years of consultation, Olivum will unveil the first bottles carrying a new sustainability label next month. The standard encompasses 98 criteria across environmental, social, economic and cultural pillars, vetted by academics and audited by independent certifiers. Producers have been beta-testing a digital self-assessment tool that generates tailored improvement plans—a model officials hint could migrate to wine and almond sectors. Retailers from Braga to Faro confirm they will give certified oils prime shelf space in time for the holiday rush, betting consumers will pay a modest premium for green credentials.

The road ahead: water, markets and reputation

Climate volatility makes irrigation policy the linchpin of Portugal’s olive future. Debates over additional pumping rights from Alqueva and the Guadiana will intensify as reservoirs shrink. At the same time, exporters eye Southeast Asia and North America, where demand for “Mediterranean diet” oils is expanding at double-digit rates. Maintaining the country’s reputation for clean, fruity profiles could unlock those markets, but only if producers can keep costs under control and prove their environmental stewardship—tasks that begin, again, with the harvest now rolling through the groves of Baixo Alentejo.