In this installment of the ‘Agronometrics In Charts’ series, Sarah Ilyas studies the state of the Chilean grape industry. Each week the series looks at a different horticultural commodity, focusing on a specific origin or topic visualizing the market factors that are driving change.
Based on a recently published USDA GAIN report, it is projected that Chile will experience an 8.6% decline in table grape production during the marketing year (MY) 2022-23, resulting in a total output of 720,000 metric tons.
This reduction in production can be attributed to multiple factors, including a decrease in the area dedicated to table grape cultivation and unfavorable climatic conditions in the central region of the country, which have adversely affected yields.
Furthermore, the trend of diminishing table grape cultivation areas is primarily driven by low profitability and intense competition from Peruvian fruit in the export markets. Over the years, the area allocated to table grape cultivation has decreased from 53,851 hectares in MY 2011-12 to 43,025 hectares in MY 2022-23. Incoming volumes culminated in week 10, at 37.1 K tonnes, 42% lower than the peak volume recorded in 2021-22.
Source: USDA Market News via Agronometrics.The competitive pressure exerted by Peru in the United States market, coupled with high production costs (including labor, transportation, and chemical products), and the growing need to modernize table grape varieties, has put a strain on table grape exporters.
Decline in cultivation areas is particularly significant in the Atacama region, which has limited alternative options for grape production. On the other hand, the Coquimbo and Valparaíso regions have witnessed a decrease in table grape cultivation areas compensated by an increase in citrus cultivation areas.
Over the past three marketing years, the table grape area planted in the Metropolitana and O'Higgins regions has experienced a decline of 14.1% and 52%, respectively. In these regions, the area previously dedicated to table grape cultivation has been replaced by more lucrative crops such as walnuts, cherries, and citrus, or has been utilized for urban expansion purposes.
Source: USDA Market News via Agronometrics.Chile is anticipated to conclude its export season with an approximate shipment of 60 million cartons. Prices this season reached historic levels, climbing as high as $37.69 per package in week 19, a 72% increase over the 2021-22 season.
Source: USDA Market News via Agronometrics.Chile is actively pursuing a comprehensive approach to enhance market access to the United States for three prominent growing regions within its territory, namely Atacama, Coquimbo, and Valparaiso.
The implementation of a systems approach is being sought as a means to benefit these regions, primarily by eliminating the need for methyl bromide fumigation as a precautionary measure against the European grapevine moth. Fumigation has been found to have detrimental effects on the quality and shelf life of the fruit, leading to reduced prices offered by retailers.
Additionally, fruits subjected to fumigation are rendered ineligible for USDA organic certification, further underscoring the significance of seeking an alternative approach. After over 20 years of negotiations, the official framework for the systems approach program for Chilean table grape imports into the U.S. is awaiting final revisions. The current proposed standard was published on Oct. 17 of last year and its public consultation process ended on Jan. 17.
Chilean authorities are eagerly anticipating the publication of the final rule, as it will provide them with a clear understanding of the specific measures and protocols that need to be followed to ensure compliance with the Systems approach. This represents a crucial step in their efforts to improve market access to the United States for Atacama, Coquimbo, and Valparaiso while mitigating the challenges associated with methyl bromide fumigation and its detrimental effects on fruit quality, market value, and organic certification eligibility.
In our ‘In Charts’ series, we work to tell some of the stories that are moving the industry. Feel free to take a look at the other articles by clicking here.
All pricing for domestic US produce represents the spot market at Shipping Point (i.e. packing house/climate controlled warehouse, etc.). For imported fruit, the pricing data represents the spot market at Port of Entry.
You can keep track of the markets daily through Agronometrics, a data visualization tool built to help the industry make sense of the huge amounts of data that professionals need to access to make informed decisions. If you found the information and the charts from this article useful, feel free to visit us at www.agronometrics.com where you can easily access these same graphs, or explore the other 21 commodities we currently track.
