- Two of the world’s largest grape producers should underperform in 2021/22.
- Spanish vineyards were hit by both storms and a heatwave in recent months.
- Argentinian vineyards were affected by frost earlier in the year.
Europe’s Grape Harvest is Underway
- The European grape harvest is underway, and it looks as though Spain, Europe’s second-largest grape producer, will underperform following July’s storms and August’s heatwave.
- We currently think it’ll produce 39.5m hectolitres of grape juice, down 7m hectolitres (15%) from the 2020/21 season.
- Aragon should suffer the largest drop, with production set to fall 23% year-on-year.
- Castilla-La-Mancha (-21% YoY), Extremadura (-20% YoY) and the Valencian Community (-19%) also face large losses.
- With this, prices for White Grape Juice Concentrate (WGJC) are sat between 1,100 and 1,200 (EUR/mt) for 68 Brix.
South America’s Grape Harvest Was Poor
- Argentina’s production also fell after its crop endured a cruel winter.
- It produced 120k tonnes of WGJC in total, down 5% year-on-year.
- Although production declined, the Government only agreed to allocate 23% of the country’s grape to the wine and juice industry, down 3% year-on-year.
- This should be fine, as its exporters are currently struggling to secure space on vessels and freight rates are holding their upward trajectory.
- However, demand for Argentinian WGJC has been strong across the last month, as have prices.
- With this, Argentina’s producers have allocated close to half of their 2021 supply.
- Argentina usually exports 55k tonnes of WGJC to the US, with Japan and South Africa each importing a further 25k tonnes; they exported 56.1k tonnes of WGJC between January and July this year, down 21k tonnes year-on-year.
- Demand could strengthen still, as apple juice concentrate (AJC) and WGJC are often used interchangeably, depending on prices.
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