1. Weekly News

France

France's Grape Harvest Dropped Amid Mildew and Weather Challenges

In France, the 2024 grape harvest is expected to reach 4 to 4.3 billion kilograms (equivalent to 40 to 43 million hectolitres), falling below the five-year average of 4.42 billion kg (44.2 million hL) and significantly lower than last year's 4.79 billion kg (47.9 million hL). Humid early summer conditions led to widespread mildew across major grape-growing regions, causing heavy losses. Additionally, cooler, wetter weather during the flowering period contributed to reduced leaf growth, flower loss, and youngberry drop. However, damp soil from prolonged rainfall could mitigate the overall production drop, although vineyards remain about one to two weeks behind last year's growth cycle. Bordeaux is expected to see lower production due to vine uprooting programs and previous mildew impacts, while Champagne may also experience reduced output following frosts and hailstorms.

Meanwhile, Italy’s overall grape production in 2023 dropped 17% year-over-year (YoY) due to extreme heat, hailstorms, and drought, leading France to surpass Italy as Europe's top wine producer for 2024. Severe weather, including hail storms and drought, significantly threatens Italy's 2024 harvest. Prosecco producers are already expressing concerns about the potential damage these extreme conditions could cause, signaling possible challenges for production levels and overall crop quality in the coming year.

Europe

EC Extends Vineyard Planting Authorizations Amid Oversupply Concerns

The European Commission (EC) has extended the validity of unused vineyard planting authorizations set to expire in 2024 and 2025 by three years, aiming to prevent an oversupply of grapes in the saturated wine market. This decision follows disturbances in the European Union (EU) wine market, driven by reduced internal consumption and weakened exports of certain wines, particularly reds. Member States must notify the EC of the grape-growing regions that will benefit from this extension by March 31, 2025. Grape vineyard owners who choose not to use their planting permits must inform their national authorities by December 31, 2024, to avoid administrative penalties. The EC hopes this measure will reduce vineyard planting and ease market pressures.

Spain

Spain's Pedro Ximénez Harvest Maintains High Quality Despite Drought Impact

In Spain's Cordoba region, the 2024 harvest of the native Pedro Ximénez grape variety has begun in Montilla-Moriles, with Asociación Agraria Jóvenes Agricultores Córdoba (ASAJA Córdoba) reporting a significantly reduced yield due to ongoing drought conditions. This year's harvest is expected to match last summer's, the smallest on record. Despite the lower output, the grape quality remains excellent as the vineyards have largely avoided significant pest issues. Total grape production is anticipated to reach 27 to 27.5 million kg, slightly exceeding last year's 26 million kg.

Ukraine

Grape Prices in Ukraine Fluctuate as Harvest Approaches

In Ukraine, grape prices fluctuated in early Aug-24. The prices of the Kishmish variety stood at USD 1.46 to 2.18/kg (UAH 60 to 90/kg) in Odesa. In comparison, prices reached USD 2.91/kg (UAH 120/kg) in Rivne and ranged from USD 2.91 to 3.64/kg (UAH 120 to 150/kg) in Pereyaslav, where the accelerated ripening due to hot weather contributed to the pricing differences. The grape supply is expected to increase by the second half of Aug-24, with imported and local Ukrainian products becoming more widely available by early Sep-24. According to the Ukrainian Club of Agrarian Business (UKAB), prices are anticipated to drop by half or more by mid-Sep-24 as supply peaks. In W33, most grapes on the domestic market are imported, with prices averaging between USD 4.37 to 5.34/kg (UAH 180 to 220/kg). Ukraine's grape production is concentrated in the Odesa region, which accounts for 66% of the country's 27.5 thousand hectares (ha) of vineyards.

United States

Record Heat in Fresno Disrupts Grape Production

In Jul-24, Fresno, California, experienced record-breaking temperatures, making it the hottest July ever recorded in the region. Notably, Fresno, a key area for fresh-market table grapes, faced 26 days with temperatures exceeding 100 °F, with a peak reaching 114 °F. Local growers reported significant challenges in grape production due to the extreme heat, including sunburn, size issues, and diminished quality despite increased water usage. The heat also shortened work hours for field workers to prevent heat-related illnesses and disrupted field packing operations. Although concerned about the immediate impacts, growers remain optimistic about the vines' recovery. At the same time, warnings were issued that such extreme weather could become more frequent, urging preparedness for future events.

2. Weekly Pricing

Weekly Grape Pricing Important Exporters (USD/kg)

Yearly Change in Grape Pricing Important Exporters (W33 2023 to W33 2024)

Peru

In Peru, grape prices increased by 8.72% week-on-week (WoW) to USD 0.98/kg in W33, compared to USD 0.90/kg in W32. There is also a 5.06% month-on-month (MoM) increase and an 11.39% YoY increase. This increase is due to adverse climatic events and frosts that have reduced grape production in the Southern Hemisphere, which impacted supply.. Additionally, disruptions in maritime traffic through the Red Sea led to increased transit times, compounding supply challenges. Despite these issues, strong demand for grapes has further supported the price increase.

India

Grape prices in India increased by 5.18% WoW and 5.48% MoM to USD 0.91/kg in W33, compared to USD 0.87/kg in W32. Despite the 22.97% YoY decline, the recent price rise is due to a combination of factors. Increased demand and the impact of early pruning, which has led to a tighter supply ahead of the October harvest, have driven prices up. Moreover, introducing new grape varieties and planting initiatives also support this upward movement. However, the overall YoY decrease reflects the accumulated effect of higher production and supply expectations from previous years.

3. Actionable Recommendations

Prepare for Grape Price Fluctuations with Strategic Inventory Management

To manage the anticipated fluctuations in grape prices as the harvest approaches, supply chain and inventory managers in Ukraine should prepare by optimizing their inventory management. Specifically, they should adjust purchasing and storage strategies to capitalize on the expected price drop in mid-September. By securing and storing grapes during the peak supply period, they can mitigate the impact of price fluctuations and ensure a steady supply. Additionally, they should monitor market trends closely and coordinate with suppliers to adapt quickly to changing prices and availability.

Implement Heat Resilience Measures for Grape Production

In response to the record-breaking temperatures in Fresno, California, which have significantly impacted grape production, growers should implement heat resilience measures. Specifically, they should invest in shade nets and cooling systems to protect grapevines from sunburn and maintain fruit quality. Additionally, they should adjust field operations by scheduling work hours to avoid peak heat times and ensure worker safety. Growers and farm managers should also develop a contingency plan for future extreme weather events, including improved irrigation systems and emergency protocols.

Enhance Vineyard Management and Set Competitive Prices for Pedro Ximénez Grapes

Vineyard managers in Spain's Cordoba region should implement advanced irrigation systems such as drip irrigation and soil moisture sensors to optimize water use and maintain grape quality despite the ongoing drought. Additionally, they should adopt soil conservation practices like mulching, cover cropping, and reduced tillage to improve soil moisture retention and health. Cooperatives should establish competitive pricing based on the high quality of the grapes and current market conditions to maximize revenue despite reduced production.

Sources: Tridge, Abc30, Freshplaza, AgroPortal, Agrodiario, Agroinformacion, Agraria, Thedrinkbusiness