International grape supply chain

Outline of increases in cost for Brazilian grape production

During the last two years, the grape production and export chain from Brazil has suffered from a sequence of extreme events, which have caused cost increases beyond the normal.

First, the pandemic caused by Covid-19 had a strong impact on production activities around the world as well in Brazil, with social distancing in the field and in the packing house; absences and losses of employees; port activities with delays; lack of containers; increase in the cost of supplies and packaging material, among others.

On top of all that, the region of Vale do São Francisco (Petrolina and Juazeiro), at the end of 2021, received high intensity rains exceeding historical levels, causing not only losses of more than 30 thousand tons of grapes (80% of the production of the first semester), and there was also the need for investments in plastic culture to cover the vineyards, which added more very high costs to production.

Then in 2022 Russia invades Ukraine. As we live in a globalized world and Europe is Brazil's main market, the initial effects of this war have already reverberated in producer's costs, with the substantial increase in fuel charges; economic embargoes; limited fertilizer supplies; shipping routes being cancelled and increasing ocean freight costs.

Thus, in this scenario of undeniable increases in costs and losses that have occurred, a survey was carried out among several companies in the São Francisco Valley, to determine the percentage value of the increases in costs that have been demanded of us, information of essential importance that has to be shared with the market.

For more information:

Eryvan Leal Pires
FruitMarket Brasil (ELPME)
Tel: +55 (81) 99794-1250

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