Harvest and Market Report of bulk wines in Chile

 

 

Chilean wineries are presently focused on the grape harvest and on the winemaking process, so there have not been many major bulk wine transactions in the Chilean market. There is also some concern around the rains forecast for late March and April.

Specifically:

  1. The rains have influenced the quantity, health, and cost of grapes and white wines, but some have noted that the quantity of white wine produced might not be quite so low. The rains in early February in the central region ranged between 20 and 100 mm, depending on the area, and affected the health of not only white varieties, but also of the reds that are susceptible to fungal diseases, such as Syrah and Carménère. This is going to move the harvest date up and may affect the quality of these varieties. The return of the heat in March has managed, to a certain extent, to slow the progress of botrytis in the grapes.

 

  1. The early harvest of grapes with low Brix readings caused a rise in demand for concentrated grape must and resulting low stock levels, leading to a price increase of between 20% and 30% over previous months, which represents an extra cost for wineries.

 

  1. In terms of the harvests of white and red varieties, the former is farther along (close to 60%). There are different estimates out there: some wineries are forecasting losses of 20% to 30% as a result of the rains, while others are anticipating earnings of between 10% and 15% more than 2020. In the case of reds, there has been no significant harvest to date, so it is quite early to predict their volume for the 2021 vintage.

 

  1. The number of COVID-19 cases has been steadily increasing in the first part of March, and this has led to difficulties in transportation of workers in both the fields and the wineries. Along the same lines, but on the positive side, the national vaccination campaign is moving along successfully; currently, around 5.2 million people have received their first dose, and nearly 2.2 million have received the second one. The pandemic has undoubtedly been a factor in the shortages in the labour force, but now with the vaccine, there is optimism that the situation will soon improve.

 

  1. The exchange rate for the Chilean peso vs. the American dollar is a very important factor to consider, especially given the unstable world economy due to COVID-19. The rate has remained weak, at 730 CLP/USD.

In the bulk market, the start of the year was slower compared to 2020, with a drop of 9.3% in volume and 3.3% in price, with China and Canada as the main purchasers. There has also been notable movement in requests for quotes, coming from the US, Canada, and continental Europe (especially Germany).

As a reference:

Cabernet Sauvignon and Merlot (varietal quality): between US$ 0.70 and US$ 0.80L FOB; Sauvignon and Chardonnay (varietal quality): between US$ 0.80 and US$ 0.90/L FOB; Tintoreras: between US$ 0.70 and US$ 0.90/L FOB, depending on colour index.

As an anecdote, based on a few requests for quotes from the UK and tenders in Sweden, some interest has been observed in the País variety, in three styles (light rosé, light red, and medium-body red), which could be a hint at a Renaissance for this historic, and long-forgotten variety.

Pablo Moreno

Agronomist Engineer – Chilean Oenologist

Bulk wine broker