Wines, musts and grapes: price comparison here in Chile and Australia

The price level of the transfer wine (the marketing between processing and fractionating plants, in the domestic market, of the bulk wine which will then be delivered to the packaged gondolas) was maintained during the first six months of the year. year below 2018 records. This behavior is verified for both generic and varietal wines.

Probable reasons, as was the case in previous seasons, are the expectations for available wine stocks (8-9 month shipments).

This situation has its correlation and its implications on the market for the sale of grapes. According to previous studies conducted by the Argentine Wine Observatory, the relative price of grapes compared to wine was 0.78 times for reds and 0.65 times for whites, a feature that was validated at using recent historical data. 15 years old.

From there, we badyze the evolution of grape prices in Australia and Chile (expressing these values ​​in dollars so that they are comparable to the prices of grapes paid in Argentina, also expressed in dollars). This comparison shows that the price of grapes paid in our country is at levels similar to those of Chile, on average, with some differences compared to Australia, as shown in the graph below.

It should be noted that the high price paid for varietal red wine in Argentina in 2017 was higher than the dollar per liter, well above all records, both in Argentina and in Australia and Chile (situation from the inadequacy of exchange rates: strong price in grape pesos and late exchange rate).

This same reason for the real exchange rate fluctuations has led us to look for another scheme for comparing the price of grapes from Argentina, Chile and Australia. To do this, we compare the prices of the grapes to the average export value of the wines of the three countries to determine if the percentage that the price of the grape represents in the value of the wine is maintained over time, which would guarantee an equitable distribution between the income of the final product and the remuneration received by primary production.

PARTICIPATION OF THE PRICE OF GRAPE IN THE EXPORT PRICE

(UVA price in US $ / US export price)

In the case of Australia, there is some stability in this relationship, which is in the order of 25% of the FOB average value of wine exports from this country. This could be explained as follows: if Australia exports a liter of wine for one dollar, the cost of the grapes is $ 0.25.

At the same time, Chile has recorded an upward trend in recent years due to the maintenance of FOB export prices and simultaneous verification of the value of growing dollar grapes. The relationship between grape and wine prices varies between 15 and 20%. Thus, if Chile exports a liter of wine for one dollar, the value of the grapes would be $ 0.15 to $ 0.20.

Finally, Argentina has had very different values ​​over the last six years, with a peak in 2017 of 28% and a sharp decline around 2019, when the ratio in June is 12%, or for every liter. For a wine sold for one dollar, the value of the grape is 12 cents, which is the lowest relationship between "grape price – wine price" in Argentina, compared to Chile and Australia.

Argentina has consistently increased its export prices due to the aforementioned macroeconomic fluctuations, seeking to recompose its revenues (which have not kept pace with the exchange rate) through these price increases.

Concentrated grape juice

In the case of the must, in 2019, it also indicates, in FOB prices, values ​​lower than those displayed in 2018, although the volumes (tons) are higher than those of last year, which gives an income almost equal (accumulated from June of this year). same year as in 2018. This performance of wort exports going back since 2016 places Argentina in first place on three of the four main import markets for concentrated grape juice (United States, Japan and South Africa). .

conclusions

For the production of wine, the industry must insist on the search for mechanisms to stabilize the price of transfer wine and grape values ​​that would allow a more equitable and stable distribution of income over time.

With regard to the must, the industry should strengthen the export policies of this product, given the opportunities it offers, as it has emerged as an important product in the chain and positioned itself as as leader in three of the four most important markets in the market. world Especially, given its important role in the internal balance of the wine chain (35 to 40% of the quintals produced in Argentina are destined to become concentrated grape juice).