In front of a noisy crowd in Cali's Pascual Guerrero, New Zealand struggled to get a foothold against a quick Portugal side in 28 degrees Celsius temperature.
Portugal took the lead in the 31st minute, when Nelson Oliviera's through-ball found left-back Mario Rui in space in the box, who calmly slipped the ball passed keeper Stefan Marinovic.
The Europeans were starved of quality shots on goal - getting away only four shots on target, with the New Zealand defenders getting their bodies in the way of several Portuguese efforts.
While Portugal dominated the game, with 62 per cent of the possession, New Zealand had sustained periods in both halves where they got forward, but also struggled to get shots away, with also only four on target.
New Zealand's best chances in the first half came from long ball's into the box, but both Dakota Lucas in the 23rd minute and Adam Thomas in the 33rd minute narrowly failed to reach the ball.
The Junior All Whites' first shot on goal didn't come until the 42nd minute, but Thomas' shot from outside the box was easily dealt with by Portuguese keeper Mika. Two minutes later Mika was forced into action again, but wasn't tested by a similar shot from Cameron Lindsay.
Several times the Kiwis looked to livewire midfielder Marco Rojas to spark the New Zealand attack, but diminutive All White was effectively muscled off the ball and out of the game by the Portuguese defenders.
The Junior All Whites' best chance in the second half came in the 64th minute after substitute Ethan Galbraith received an intelligent square ball from Rojas on the edge of the box, but his low, hard strike was dealt with by a diving Mita.
The Kiwis struggled with referee Kim Dong Jin who blew 17 fouls - many with little or no contact made - compared to Portugal's 11.
"The boys were tired and exhausted and they gave me everything that I asked for but unfortunately we made one mistake when we didn't track the runner inside. They scored a goal and then even at in the last 15 or 20 minutes we couldn't get the ball in the net," Milicich said.
"Portugal were just a little too professional at keeping the ball from us.
"Last time a team from the Oceania region was at this tournament they lost 8-0, 8-0 and 5-0 so were really pleased we restored a lot of respect for Oceania at this level."
In the other Group B game, Cameroon beat Uruguay 1-0, with Emmanuel Mbongo's first half strike separating the teams.
New Zealand must now wait to learn their progression fate, as they hope to secure a best third-place team spot in the Round of 16, while Portugal and Cameroon have booked their knockout round place.
