We present the February 2024 report awaiting the harvest in Australia, New Zealand, Chile and Argentina.
AUSTRALIA – The Australian harvest is well underway, white volumes are up on 2023, by how much is unknown as we are experiencing some hot weather which will impact crops.
Red volumes are challenging, Australia is still in a heavy oversupply for red wine and subsequently wineries are only bringing in what they need too, large amounts remain uncontracted this year.
Chardonnay is AUD1.00-1.10 FOB, Shiraz & Cabernet is AUD0.50 – 0.65 FOB.
NEW ZEALAND – New Zealand is having a much smaller harvest due to a hot & dry summer, uneven fruit set and other factors.
2023 Sauvignon Blanc volumes is still available ranging from NZ 3.30-3.80 FOB.
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CHILE – We have an excess of wine, especially red wines, between 1,500 and 1,600 million litres. These are estimates from December 2023, figures that mean 25% more than the normal stocks in Chile at this time of year, before the new harvest.
Harvest 2024: The generally low production of fruit, such as cherries, is due to climatic factors, as we had a spring with very unstable weather. It was thought that we would also have low grape production, but the weather stabilised and we had a normal end of spring and summer. Therefore, it is expected that, in terms of volume, we will have a normal harvest. Which, in this situation of overstocking, is not good. Because there will be no good price adjustment for producers.
Exports 2023: Wine exports to Chile, both bottled and bulk, are down by 20%. For our market this is a historic drop. We have never seen such declining levels of wine exports and, of course, this has been reflected in the current stocks and low prices being handled in Chile.
At the end of 2023 and now, at the beginning of 2024, there is an increased interest in Chilean wines due to the limited availability that currently exists in Europe, especially for white wines in Italy and Eastern Europe. Here, deals have already been closed to supply white wines that used to arrive in Europe from South Africa and Eastern Europe.
Bulk wine price projection: Although demand and interest for Chilean bulk wines have increased, prices have remained low, with ranges of US$ 0.40-0.45 x Lt for red varieties and US$ 0.65-0.70 x Lt for white varieties. Generic red is marketed at US$0.35 and generic white at US$0.50 (all values are FOB Chilean port).
For the rest of the year: we expect the high level of stocks to be maintained; here we see stable prices at current levels for the rest of the year, no increase, let alone a decrease, as current prices are already very low.
- Carmenere Entry Level U$S 0.45
- Merlot Entry Level U$S 0.45
- Cabernet Sauvignon Varietal U$S 0.45
- SAUVIGNON BLANC ENTRY LEVEL U$S 0,65
- CHARDONNAY ENTRY LEVEL U$S 0.65
(all prices are FOB Chilean port)
ARGENTINA – (Mendoza, where over 70% of Argentine wine is produced) A lot of snow accumulated in the Andes Mountains this winter, so we will have no problems with water supply throughout the summer.
In spring, there were some frosts, which mainly affected the Uco Valley, where high-end grapes are produced. Therefore, little grape production is expected in this area, especially white grapes such as Chardonnay.
The other areas were not affected by frost or unusual weather effects, so in terms of quality and quantity, normal volumes and quality are expected.
Regarding prices and trends: The new government, which took office last December, lifted import restrictions, but also depreciated the Argentine Peso. We are seeing an increased availability of all imported supplies, but these have not fallen in price, rather the opposite. At the same time, we continue to have high inflation (6-8% per month), which should slowly come down. And the wine export tax has been increased from 4% to 8%.
As can be seen, economic conditions are not very good at the moment. At the same time, wine consumption in the domestic market continues to decline. In the cellars there is a good supply of wine 2023 and exports have not done very well. It is therefore difficult to raise wine prices.
Bottom line: right now, with the harvest underway, we have a small upward trend in prices for varietal and higher quality wines due to the increase in grape prices (inflation). But basic (generic) quality wines have already gone down, and will remain low, because there is little demand for these qualities and we will have more grapes available than last year. There is some instability on generic whites, as grape producers are going on strike to push the government for higher prices for their grapes.
In my personal perception, this slight upward trend will continue for a few months and it is very likely that, once the harvest is over, prices will stabilise at values very similar to last year’s and perhaps, in the second half of the year, the trend will be downward:
- Malbec base: US$ 0.83
- Malbec entry: US$ 1.00
- Chardonnay: US$ 1.15
- Torrontes: US$ 0,82
(all prices are FOB Chilean port).
Carlo Miravalle, Miravalle 1926