The global grape market in July has been hectic so far. Major producing countries in Western Europe are hit hard by increased production costs and unexpected heatwave, and for some countries, this will be a great opportunity to penetrate new markets. For this analysis, Tridge's country representatives and market analysts provide the grape market situation in major buyer countries and countries of origination.
US: Grape Harvest Season Kicked off Later than Expected - July 7th
The grape season in the US started slowly due to heatwave issues. However, it is expected that this situation would allow for more flavor to come on because that is usually the concern when growers face early harvest season.
Sugraones season started at July 7-9th tentatively. The size was ready earlier for domestic distribution and exports, just exporters were waiting on the Brix to reach the optimal level for exports.
Egypt: Egypt Grape Harvest was delayed due to weather issues
Egypt started the season about 2 weeks later than planned, instead of mid-May, most suppliers did not have a fully mature crop until the end of May. This delay was due to the weather factors that delayed the crop's maturity.
This delay caused most of the suppliers to lose a big chunk of their programs to Europe (being the main destination for the early Egyptian grapes), mainly the UK, Netherlands & Russia, on the other hand, big quantities of Chilean grapes invaded the market in Europe this season for the first time which caused a lot of headache to Egyptian exporters and also has driven the selling price down. This situation caused many crops to be dumped in the local market and affected the export prices as well, by the end of June, suppliers were exporting at prices 25-30% lower than the beginning of June.
Grape suppliers' exports decreased by 40-50% compared to the same period last season. Right now, we are in the second half of the season with the late varieties like Crimson, Red Globe, and Autumn Royal, and the demand is still lower than last season, and prices are dropping.
Spain: Spanish Grape Suppliers Expected to Be Highly Price sensitive Due to Increased Production Costs
Spanish table grape producers expect a slight increase in production volumes for the 2022 season but also expect higher prices due to increased production costs. Producers are expected to highly price sensitive in 2022 and will seek out the markets that are willing to pay the highest prices. Buyers who are willing to pay slightly higher prices for their grapes will be able to secure sufficient volumes for their demand in 2022, while buyers who are not willing to pay higher prices will struggle to secure volumes outside of peak season.
Portugal: Heat Wave in Portugal to Result in Wine Grape Production Loss of 25-30%
The heat wave that began on July 10th continued for nearly ten days, making it one of the three longest heat waves since 1975. Vines have great difficulties carrying out photosynthesis when temperatures exceed 35ºC. The heat and water stress suffered by the vines result in less branch expansion and smaller berries. Fewer and smaller berries will translate to less wine, with production losses estimated to be 25-30%. The producers that have irrigation will be able to mitigate these losses. Ervideira, for instance has doubled its irrigation from the normal 150,000 liters/ha of water to 300,000 liters. However, there are wine regions where water is scarce or irrigation has traditionally not been required. Vines in these regions will suffer severe heat and water stress, increasing production losses beyond 30%. The only positive aspect of the heat wave is that the shortage will be beneficial for stock depletion of previous campaigns, especially for red wines.
Netherlands: Demand for Fresh Grapes in European Markets Increase Slightly in July
Demand for grapes in European markets increased slightly in week 28. After a disappointing start for the Egyptian grape campaign, buyers are now more interested in this origin. The primary reason is the low availability and high prices of grapes from European origins such as Spain and Italy. The rotation of stock is more dynamic, despite holidays and the heat wave which is affecting a big part of the European continent. The increased demand has not translated into an increase in the price of grapes because many importers are still processing large stocks at their warehouses. In one or two weeks, stocks of Egyptian grapes will be lower, leaving an empty market for Spanish and Italian grapes.
Germany: Weather Limits Fresh Spanish Grape Volume Destined for Germany in 2022
Some grape-producing regions in Spain experienced unseasonal rainfall, meaning that additional pesticide applications might be needed to prevent diseases such as powdery mildew. The use of additional pesticides results in the grapes being ineligible for export to Germany, the second largest export destination for Spanish grapes. Producers from the affected regions will have to find an alternative market for their grapes. At the same time, buyers in Germany will need to find an alternative supplier of grapes for the 2022 season to fill their demand.
Indonesia: Price War on the Indonesian Grape Market Caused by Oversupply
Indonesia’s wholesale price for fresh grapes has been consistently declining until Week 25, and slightly moving upward in Week 26-28 at the range of USD 20-23.4/box. The overall downward trend has been afflicted by the large volume of cheaper Chilean products that entered the market since Q2, at nearly the same time as the arrival of the Australian grapes. Australian grapes were initially expected to be absorbed in Q1, yet logistic and manpower issues in origin country affected delayed shipments. Oversupply has been happening since mid-Q2, leading to a price war in East Java--the epicenter of nearly 45-65% imported grapes, based on POD location.
