This year the supply of grapes has been significantly affected by the weather. Rain during December in South Africa devastated some vineyards and has affected the quality and led to a big drop in volumes. While in Chile widespread abnormal rain in January affected major production areas which traditionally supply the EU market, which will mean significantly less available volumes. In the north of Chile water shortages combined with rising labour costs has left many growers struggling to maintain vineyards well. Whilst this northern fruit does not normally come to Europe, it made price levels in later areas far too high for Europe.
The export figures from Chile show just how dramatic the drop in volumes is. Export figures to Europe up to week 8 show that only 19,300 tonnes have been exported compared to 2012 when 61,200 tonnes had been exported. Even taking into consideration that last year exports began very early this is still a significant drop. In 2010 the year of the Earthquake in Chile, the figure was 43,800 tonnes, the average over the last six years stands at 57,000 tonnes with the highest ever export at week 8 being 69,000 tonnes in 2009.
Green explains that, "Demand for Chilean grapes from the US and Far East markets has been huge, significantly increasing the price. Also Chile did not have a good year in the EU in 2012 when they flooded the market with Flame seedless and had such an early White seedless season, they clashed with Argentina and South Africa. I have never seen such a dramatic shift in market distribution. This season so far only 2,100 tonnes of Flame have been shipped to the EU, the six year average is 8,500 tonnes."
Indian grapes are now entering the market, these too have not escaped the effects of the weather, heavy rain fell in week 7 leading to splitting and downy mildew. The lower temperatures have also slowed the sugar levels.
Week 9 is the normal transition week from South African grapes to Chilean and Indian white seedless. According to Green some Scandinavian countries are moving straight to Indian grapes due to the longer storage life/ reliability factors and also seeking lower prices.
"Indian grapes store very well although the cosmetic appearance is not as good as Chile, many retailers prefer them for the value lines and use the Chilean grapes for the loose selections."
For 2-3 weeks the price for Indian grapes have been at record levels in the field, due to low supply and high demand from the European and domestic market. According to Green, Indian grapes are no longer cheap, but on par with Chilean grapes.
"The local prices in India will start to change at the end of next week when the Chilean grapes begin being shipped towards the EU market in far larger quantities than so far this season. With prices so high for Chilean grapes in other markets demand will inevitably drop off as volumes peak so eventually creating more shipments to Europe," explains Green. “The volumes from India will be higher than last year to Europe but not hugely, but the Chilean volumes will again be lower, continuing the 5 year trend.”
For more information:
Geoff Green
Capespan Global Procurement
United Kingdom
Email: Geoff.Green@capespan.co.uk