Olive oil, Tunisia overtakes Italy. Why are we producing less?

Tunisia overtakes Italy in olive oil production and becomes the world's second largest producer behind Spain. The news was relaunched by the Financial Times and makes a noise even though it is nothing new. Just some time ago, due to alternating production and a particularly poor year, Italy had even slipped to fourth place among the world's leading producers (surpassed by Greece and Tunisia). The problem, if anything, is that the current Tunisian overtaking is no longer merely episodic but has the contours of a structural process.

According to estimates, Tunisian olive oil production in the 2025-26 marketing year could exceed 380-400 thousand tonnes (but projections credit Tunisia with a potential of 500 thousand tonnes) against the approximately 300 thousand expected in Italy. It should be remembered that Italy produced just under 800 thousand tonnes until 2000. What has happened in this quarter of a century?

On the one hand, the recent growth in Tunisian production seems to have been driven by the sharp escalation in olive oil prices around 2024 when a momentary collapse in Spanish supply (penalised by drought) pushed international extra virgin prices to their highest levels.

On the other, the collapse of Made in Italy oil. National production has been reduced to a minimum due to a number of concomitant causes. First of all, the strong growth of new competitors, starting with the veritable Spanish explosion and more recently Tunisia, Turkey and Morocco, has reduced margins for producers. The productions of these new competitors are often intensive, made with strong recourse to mechanised harvesting and therefore with much lower costs than traditional Italian olive growing. This mismatch, in many cases, instead of prompting Made in Italy olive growers to respond by investing and restructuring national olive growing has often diverted them towards abandonment and exit from the sector.

A not marginal, negative role was also played by the devastating EU mechanism of decoupling EU aid introduced in 2003. In essence, Brussels ensures that Italian olive growers receive an aid amount proportional to their historical production even if they have stopped producing. The combined effect of these elements has been a rush to abandonment. In Italy, it is conservatively estimated that around 300,000 hectares of olive groves out of a total of 1.1 million hectares have been abandoned in the last 20 years.