Chilean bulk prices to rise following poor harvest

Prices of Chilean bulk wines are set to rise “pretty soon” following poor weather during this year’s harvest, Wines of Chile have said.

Recent reports are forecasting Chile’s harvest may fall by as much as 30% this year, primarily due to heavy rain during the harvest in April, when rainfall reached around 150mm in some areas. The total harvest was already running late following a period of cool weather when the rain hit, a report from bulk wine specialists Ciatti stated. Cabernet Sauvignon and Carmenere were the most affected varieties, but the majority of Chardonnay, Sauvignon Blanc and Tintorera had already been harvested before the rains hit and were likely to be of good quality due to the cooler weather.

Wines of Chile are forecasting a production range between 900 to 950 million L, however it noted that due to a surplus last year – the country produced 1,286 million L of wine, which had resulted in a 120m L of over-stock – there was unlikely to be a shortage.

“This is a 30% to a 26% decrease, but nevertheless considering that before the harvest started we had a 120 million L surplus, we estimate that after the production process we will not have any supply issues – we will have 93% to 98% of stock over sales, which is quite balanced,” a spokesman from Wines of Chile told db. Although this was not likely to have an effect on supply of bottled wines, she admitted “the bulk situation was likely to be different”.

“Bulk wines will increase in prices – in March the prices was about 0,61/L [but] we believe the price of bulk will go up pretty soon,” she added.

Ciatti reported prices of bulk wines in South America had already started to rise but that as wineries were holding off firm pricing until they could confirm the volume and quality of the harvest and that “nothing has been firmly established”.

“Prices of wine are on the rise in South America and we are already seeing some upward pricing pressure in other varietal driven bulk wine markets,” the report said. “Buyers and sellers alike are scrapping their pre-harvest plans and trying to figure our how to re-adjust and stay competitive.”

It also pointed to falling volumes in Argentina, which has seen a harvest of around 1.75m metric tonnes – nearly 37% lower than the average crop, it said, pushing up the price for grapes by around 100%. It also pointing out that this was the second below average crop in Argentina in a row, after volumes dipped 15% in 2015 to 2.4m metric tonnes, largely on the back of poor weather.

Ciatti now expects countries such as Spain to pick up the shortfall from South America, provided it has a large enough harvest.

However according to the latest Ciatti report, volumes in New Zealand and Australia were above average, with South Africa only slightly lower than last year.