Freeze Will Impact Argentina’s 2011 Wine Harvest, Exports

The U.S. remains the number one destination for Argentina's wine exports. (Source: Diario de Cuyo)

With wine harvest season just around the corner in Argentina, the pride in last year’s achievements (e.g., eclipsing Chilean exports, greater U.S. market share, etc.) has turned to genuine concern over the impact November freezes may have on 2011 production, exports and pricing.

Diario de Cuyo says Mendoza wineries will need at least 60 million kilos of grapes to meet international demand, including 30 million Malbec, 10 million Cabernet Sauvignon and 10 million Chardonnay kilos. Given the weather’s impact on supply, some analysts say wineries may be paying twice what they were last year for these grapes.

Of concern, the November freezes impacted one of the best growing regions in southern San Juan, Pedernal, as well as areas of San Carlos, Tunuyan and Tupungato, and some regional growers lost 30-70% of their grapes. As a result, Diario de Cuyo estimates grape prices per kilo will rise 4-5 pesos (US$1.00-1.25) this year, but we will not know the actual increases until next week for whites and mid-February for reds.  The above infographic shows the phenomenal growth in both Mendoza and San Juan production since 1990 with some varietals surging 10-12,000%.

According to the Instituto Nacional de Vitivinicultura (INV), Argentina’s wine exports topped US$630 million in the first eleven months of 2010 and full-year projections come in around US$705 million. Of that total, the top four international markets account for two-thirds of Argentina’s wine exports: the United States (39%), Canada (12%), the U.K. (7%) and Brazil (6%). (Full Story in Spanish)

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