Fresh table grapes remain Peu's top agricultural export. While suffering recently, the industry is expected to bounce back with forecasts expecting an increase in production, despite exports dropping 10% from the effects of the weather phenomenon known as the coastal El Niño.
However, the heavy rains and unstable temperatures caused by the El Niño that hit Peru in early 2017 delayed this year’s harvest. This delay caused a supply overlap in March and April with neighboring table grape powerhouse, Chile, resulting in inventory surpluses that drove-down prices.
Nonetheless, in response to strong export demand, Peru’s grape production is forecast to rise in MY 2017 due to new plantings coming into production and higher yields in maturing vines.
Fresh grape production is mainly located in Ica (41 percent) and Piura (22 percent). The total area under cultivation is estimated at 28,000 hectares. FAS Lima forecasts Market Year 2017 (October 2017-September 2018) production at 638,000 MT. This increase, driven by strong export demand, is due to new plantings coming into production and higher yields in maturing vines.
Production is still dominated by one variety, Red Globe. While Red Globes remain popular in the growing Chinese market, producers are shifting toward higher value varieties to supply to other markets. Producers are diversifying to over 20 different varieties that meet the evolving palate of consumers worldwide. The most popular of these other varieties include Crimson seedless, Flame seedless, Surgeon and Thompson seedless.
Trade
FAS Lima forecasts exports reached 380,000 MT in MY 2017, about ten percent less than what the industry expected due to damage caused by the excess rainfall brought by El Niño season. The United States is the top export destination, followed by the Netherlands and China.
Grapes continue to be a top agricultural export for Peru’s with exports at $660 million in calendar year 2016 (SUNAT, Peru's customs and tax authority). Price volatility as a result of increased global competition and uncertain weather conditions will need to be monitored. As the second largest exporter of grapes to the US, price/kg trends will be an important metric to follow.
Consumption
FAS Lima forecasts domestic consumption levels will be 250,000 MT in MY 2017, a decrease from MY 2016 due to strong export demand and reduced domestic supply. The local grape market is used as a secondary market for producers because prices are significantly lower than international prices.
Green Italian grapes continue to dominate the local market. The pisco industry is another significant consumer of grapes. The Ministry of Production estimates Peru's pisco output will total 11 million liters in 2017. Chile and the United States are the largest consumers of Peruvian pisco. Lima and Ica make up 90 percent of the total production of pisco.
For more information: gain.fas.usda.gov