Global Grape Market Situation and 2023 Outlook

According to the recent USDA Global Deciduous Report, world production for the 2022/23 campaign is forecast to increase by 1.2 million mt to 27.4 million as good growing conditions boost output in China and Turkey, offsetting losses in Chile and India. Chile’s position as the world’s top table grape exporter is expected to be challenged by Peru in 2022/23. Chile has been the leading exporter for decades, but in 2022/23, Peru is forecast to exceed Chile in production for the second time in 3 years and in exports for the first time.

United States

For the 2022/23 season, US table grape production is forecast to increase by 24 thousand mt to 850 thousand mt after three consecutive years of reduced output. The increased forecast would represent only a slight recovery of grape production in the US as droughts and frosts will hinder a most robust recovery. Californian grape growers will continue to face labor and water availability issues, which were key factors for the 2021/22 season production decrease. Besides water and labor issues, California witnessed a turbulent growing season in 2022 owing to intense heat, which led to challenging growing conditions and higher input prices, leading to lower profits.

According to the August 2022 USDA's NASS Crop Production report, grape exports from the US are projected to stay even from last year at 255 thousand mt on sustained shipments to top markets. Imports are projected to increase by 32 thousand mt to 745 thousand mt as greater supply from Peru and Chile are forecasted to boost imports around May-April, which will be the beginning of the 2022/23 season.

Peru

Peru's output is expected to increase by 7% YoY, growing 53 thousand mt to reach 766 thousand mt for the 2022/2023 campaign. Favorable weather conditions, plenty of water supply, and growing demand for table grapes are driving the increase and expanding growing areas. These conditions, combined with precision irrigation, enabled Peru to mature vines 55% faster than in neighboring countries.

Higher output is expected to boost grape exports in Peru for a fifth straight year, surging nearly 50 thousand mt reaching 585 thousand mt, for an 8% YoY increase. If realized, Peru would surpass Chile to become the world’s top exporter in the 2022/2023 campaign. The focus this season will primarily be on varieties such as Allison, Sweet Globe, Crimson, and Sweet Celebration. Expanding market presence in the US, the EU, and Mexico have been the catalyst for Peru's export growth. For the 2022/2023 season, the country will continue its efforts to expand its export markets, including Japan, which is the third largest market for the United States.

Chile

Following last year’s rebound, table grape production in Chile is expected to drop by 56 thousand mt to 737 thousand mt as the country continues its slow downward production trajectory. Chile’s growers have faced multiple challenges during the last ten years, including damaging floods, freezes, and drought. These challenges have not only reduced grape production but resulted in lost acreage as growers switch some acreage to more profitable crops, including the top growing regions. In Valparaiso, Chile’s leading table grape producer, walnuts and citrus have replaced some table grape acreage, while walnuts and cherries have replaced some acreage in the second-largest producer region of O’Higgins.

The reduced output is expected to decrease exports by almost 10% YoY to 555 thousand mt for the next campaign. While Chile is reducing its output and exports, Peru’s Peru’s rising output is expected to boost exports to 585 thousand mt, which will make Peru become the world’s top exporter.

Mexico

For 2022/23, Mexico is forecasted to reduce its grape planted area by 8% YoY as farmers have found it difficult to obtain funding to switch to new grape varieties and to incorporate technology in the field for efficient use. Water control to address drought and climate change-related issues have become a critical challenge for Mexican growers. Input expenses have increased as well. Therefore, farmers are considering the prospects of switching to more lucrative horticulture crops, such as tomatoes, peppers, squash, asparagus, and watermelon.

For this reason, the production forecast in Mexico for MY 2022/2023 is at 347 thousand mt, 3% lower than the previous year. However, Mexican grape exports are forecast to remain unchanged from the previous year at 196 thousand mt both production and consumption are projected lower. Most of Mexico's table grape production is exported to the US (99%), with small quantities to Japan (1%).

China

China's production is expected to increase by 620 thousand to 12.6 million mt as good growing conditions improve yield and quality. Planted area is expected to remain stable while some production is shifting from traditional grape areas to southern provinces. Exports are expected to rebound on greater supplies, rising 24 thousand mt to 375 thousand mt with higher shipments, especially to Vietnam and Thailand. Imports are forecast to continue their decline, decreasing 11 thousand mt to 170 thousand mt as improved production practices, newer varieties, and adoption of cultivation technologies raise output and improve quality, reducing import demand.

Turkey

Turkey's production is forecast to recover from last year’s frost damage, surging 20% to record 2.2 million mt on favorable growing conditions. Exports are projected to increase for a fourth consecutive year as greater supplies, and continued overseas demand is expected to lift exports to a near record of 270 thousand mt.

India

India production is forecast to remain slightly unchanged at 2.9 million mt on a second straight year of excessive rainfall in September and October, resulting in delayed pruning and a shorter harvest period. Combined with above-normal temperatures, higher volumes of lower-quality fruit are expected. Insufficient cold chain infrastructure and domestic and foreign demand are also prompting growers to increasingly divert grapes to raisin production, further reducing fresh supplies. Exports are expected to decrease slightly to 270 thousand mt of the reduced availability of fresh grapes.