Disappointing Chilean Wine Harvest 2023 (for wine growers)

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(Very) Low prices for grapes grown for wine and an early harvest will be the keynote of this 2023 vintage, still in evolution, for a large part of the more than 130,000 planted hectares.

Due to the lack of post-Covid reactivation in many countries, mainly China and Europe, high world stocks of wine have accumulated. This has led to Chile’s most extensive wine inventory since it was recorded with 1,400 MM litres (88% with D.O.) (Appellation of Origen or D.O. ODEPA, Wines of Chile). On the other hand, extremely high summer temperatures accelerated the ripening of wine grapes with less growth due to a cold spring, decreasing the potential for growth (and production) and later bringing forward the harvest, in many cases, before achieving optimal parameters for vinification.

Over this reality, we must add the severe summer fires that damaged just a smaller portion of the total hectares, but unfortunately, more to small Itata region vintners. This will generate some damage from direct smoke but more due to psychological contamination on winemakers and consumers. Altogether these are events that are nothing new to this export-oriented business with 830 MM Lts (2022), but where again, the wine grape grower (farmer) has no influence, except on the fait accomplifait, in the decision to harvest: Selling wine grapes at low prices or still making wine (and paying for it) with no margin hoping for a better future price for wine, in a market flooded with it are the choices.

The most probable solution for the decompression of the stock will come from adjusting the final price of the wine, particularly in large volumes and bulk, which corresponds to 39% of the total exported with an average price of USD 0.93/Lts (ODEPA, 2023).

At Asesorías del Agro GCA Ltda we are also in the wine industry, with experience in specialized agricultural appraisals, search for new short and long-term debt, investment opportunities and participation in family winery boards. Attached are some official figures and photos of today’s tour with clients and future clients

Gustavo’s Vineyard tour 2023

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About Gustavo Cardemil

Gustavo is the Managing Director & Founding Partner of Asesorias del Agro GCA Ltda, a niche consultancy firm specialized in Financial advisory, rural real estate, and services for the agricultural sector since 2015. Gustavo is a multidisciplinary professional, with more than 20 years of experience in agriculture and finance, with a vast knowledge in management, strategy, banking and rural financial risk assessment in Chile and Peru.

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