Portugal's Agri-Food Exports Fall for the First Time in a Decade — Olive Oil Prices Are the Culprit

Portugal's agri-food and beverage export sector recorded its first decline in value in ten years in 2025, with revenues falling 4.5 percent to 7.8 billion euros. The drop, confirmed by the Federation of Portuguese Agri-food Industries (FIPA), is almost entirely attributable to a sharp correction in international olive oil prices after several years of record highs driven by Mediterranean drought.

The headline figures mask a more nuanced picture. In volume terms, the sector actually grew, with the quantity of olive oil exported increasing by 10 percent. The issue is that olive oil — long the crown jewel of Portuguese agri-food exports — was changing hands at dramatically lower prices after supply recovered across the Mediterranean basin. Portuguese olive oil production did fall around 10 percent in the most recent campaign due to difficult conditions in some regions, but that was not enough to maintain the elevated price levels that had turbocharged export revenues in 2023 and 2024.

FIPA president Jorge Tomás Henriques was careful to frame the numbers in context. "This decrease does not reflect a loss of market share," he said, describing it instead as a value adjustment after a period of exceptional pricing conditions. The federation expects volumes to remain solid, but warns that the strategic target of reaching 10 billion euros in annual agri-food exports by 2030 is now under pressure unless structural competitiveness is improved.

To that end, FIPA is pressing the government for a series of policy changes. The most immediate request is a revision of the 23 percent VAT rate applied to certain food products, which the federation argues creates a competitive disadvantage relative to EU partners. Energy costs — a persistent complaint across Portuguese manufacturing — are also cited as a burden that makes it harder to price competitively on export markets. The federation is additionally pushing for a more assertive role from AICEP, the government's trade and investment promotion agency, and stronger economic diplomacy to help smaller Portuguese producers break into new markets outside the EU's established trade corridors.

The broader significance of the drop extends beyond olive oil. Portugal's agri-food sector is one of the country's most internationally recognised export pillars, alongside tourism and technology services. Other products — wines, cork, seafood, and packaged foods — continued to perform solidly, but none carry the pricing leverage that olive oil commanded at its peak. The sector now faces a period of adjustment as producers recalibrate to a market where consumers, having adapted to lower prices at the supermarket shelf, are unlikely to accept a sharp return to previous cost levels even if supply conditions tighten again.

For those living in Portugal, the correction has a silver lining: domestic olive oil prices have fallen significantly from the highs of 2023, when a one-litre bottle regularly exceeded ten euros in Portuguese supermarkets. IPMA's most recent production data suggest the 2026 campaign may also bring further price stabilisation, though the final figure depends heavily on conditions in the main growing regions of Alentejo and Trás-os-Montes over the coming months.