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Chile’s olive oil sector faced a significant downturn in 2026, with production falling 17% year-on-year to 16.6 thousand tons. The decline is primarily attributed to unfavorable weather patterns, characterized by extreme temperatures and a critical shortage of irrigation water. Industry data from ChileOliva indicates that production has been volatile over the past six seasons, swinging between lows of 15 thousand tons and peaks exceeding 20 thousand tons.
The average annual output over the last five years reached 17.82 thousand tons, reflecting a downward trend compared to the 21.7 thousand tons averaged during the preceding five-year period. Northern regions bore the brunt of the climatic stress, particularly Coquimbo, which hosts approximately 16% of the nation's olive groves. Insufficient winter chilling hours hindered the physiological development of the trees, while water scarcity further eroded productivity. Central and southern regions experienced a less severe decline, though heat stress remained a limiting factor for yields across the board.
Shrinking cultivation areas also continue to impact total output. Current estimates place Chile’s olive groves at 19.7 thousand hectares, a notable decrease from the 22 thousand hectares recorded in 2018. The expansion of plantations is being stifled by climate variability, water access issues, and escalating production costs—most notably for labor and energy. These constraints have collectively dampened investment in new olive developments.
Paradoxically, while volume fell, export revenues soared to a record $35 million in the first half of 2026, marking a 32% increase year-on-year. The United States and Brazil remain the dominant markets, accounting for 80% of export volumes and 82% of total value. Spain follows as the third-largest importer, while Chilean exporters are aggressively targeting growth in Mexico, Japan, and Taiwan.
Looking ahead, the industry's resilience will hinge on water management and the adaptation of cultivation techniques to mitigate climate change risks. Representatives from ChileOliva emphasize that efficiency in irrigation, better temperature-risk management, and optimized harvest windows are essential. Moving forward, the industry is prioritizing high-quality standards and market diversification to sustain its competitive edge in the global oils and fats trade.
Source: UkrAgroConsult