Brussels, July 28, 2025 (Lusa) - The European Commission forecasts that the European Union (EU) agricultural markets will grow by 1.1% this year and 1.5% in 2026, anticipating a historic drop in wine, including 8% in Portugal, and recovery in olive oil.

According to the summer 2025 edition of the report on the short-term outlook for EU agricultural markets, released on Monday by the EU executive, wine production is expected to be 10% below the five-year average, with an annual decline of 5% to a 20-year low (137 million hectolitres) in the period 2024/2025.

According to Brussels, this is due to a 25% drop in wine production in France, 11% in Germany and 8% in Portugal, which is not offset by increases of 15% in Italy and 10% in Spain.

Olive oil production is recovering sharply, with a 37% increase up to June, which has led to a fall in prices.

Poultry production is also expected to grow, supported by growing demand, and milk deliveries remain stable, according to the Commission.

On the other hand, production prospects are declining for sugar and ruminant meat, in addition to wine.

Meanwhile, food inflation in the EU remains higher than overall inflation (3.1% compared to 2.2% in May), although some stability - or even deflation - is observed in some food categories.

Despite historically high levels, EU farmers have recently seen a stabilisation in input costs.

The report anticipates that oil prices will fall, although tensions in the Middle East could affect this.

Geopolitical instability, climate-related challenges and the evolution of trade policies of major global players such as the United States and China pose threats to the stability of world markets and the EU, Brussels warns.

IG/AYLS // AYLS

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