As we approach the end of the second semester, Augusto Prado, President of ARRA Brazil, reflects on the first half of 2024, which was marked by unusual weather patterns. Rainfall exceeded 750 mm, primarily during February and March, leading to a significant production decline of approximately 40%. For the latter half of the year, a further reduction of around 25% is anticipated, due to the effects of these extreme weather patterns.
The impact of extreme weather is not confined to Brazil; similar challenges are being faced globally, particularly in Europe and Australia. However, demand for high-quality grapes remains strong within Brazil as well as in key export markets like Europe.
Currently, Brazilian grapes are entering the European market, when prices are surging with recent heatwaves severely impacting grape yields in Italy, Spain, and Greece. Looking ahead, we expect exports to Europe to ramp up shortly, while the U.S. market may conclude its season earlier than usual, making supplies from Peru critical. While Namibia and South Africa are preparing to begin their harvests, logistical challenges—particularly from Cape Town—remain, though we expect a gradual increase in shipments from Namibia, complementing South African exports.
While the grape market is facing challenges, the combination of strong demand and limited supply suggests that prices are unlikely to drop significantly in the near future. As we navigate these complexities, the resilience of the Brazilian grape sector will play a vital role in shaping the upcoming market landscape.