Global Grape Market Shifts
The global grape market is currently experiencing significant shifts due to a series of unexpected weather events in key producing regions. These events have led to notable losses in some areas, impacting the overall supply that subsequently affects market prices. Vanguard Logistics looks at the state of the grape market while recapping the seasons in South Africa, California, Chile and Northern Peru, and their influence on the global grape market.
South Africa’s Grape Market Outlook
South Africa’s grape market is currently in a favourable position, with a good crop yield expected. Even though there were damages and flooding reported, it will not significantly impact the region’s production. This stability in supply from South Africa provides a welcome contrast to the challenges faced by other key producing regions.
The South African Table Grape Industry (SATI) released information in its first crop estimate for the new season. SATI expects a 12% increase in volumes inspected for export compared to the actual inspected volumes of the 2022-23 season. This is in line with the three-year average volumes. SATI indicates a national crop estimate of 73.0 million cartons is anticipated, with the upper expected limit at approximately 75.2 million cartons and the lower expected limit at approximately 70.8 million cartons.
California Faces Major Losses
California is a major grape-producing region and potentially faces a staggering 50 per cent loss in total crop yield. This significant reduction is attributed to a combination of factors, including unseasonably hot weather, wildfires and conditions experienced from Tropical Storm Hillary. The impact of these adverse events has been devastating, exacerbating the challenges already faced by the region. The resulting 40-50 per cent loss in California’s grape production was one of the first dominoes felt through the global market.
Chile’s Stable Production
Chile appears to have weathered the storm relatively well, with grapes looking healthy overall. While there was some rain, it is projected to have minimal impact on the crop. This is positive news for the market, as Chile plays a pivotal role in global grape exports. However, with on-going shifts in weather patterns, it remains important to monitor the situation closely.
Northern Peru’s Production Setback
Northern Peru, which is a crucial player in the global grape market, has encountered a substantial setback with a 20-25 per cent loss in crop yield. Adverse weather conditions early in the season, including excessive rains and floods, created unfavourable conditions for grape production. This has led to a drop in volume and issues with mildew, affecting the quality of sweet globes. The result is a significant loss of over 9 million cartons, putting a strain on the global grape supply chain.
Impact of Climate Phenomena
The increasing frequency of El Niño and La Niña events is undoubtedly affecting grape production globally. These climate phenomena introduce unpredictability into the growing conditions, making it challenging for growers and customers to anticipate yields accurately and resulting in a demand massively exceeding supply.
Sources: Fresh Plaza and SATI