GRAPE HARVEST 2010: THE PRICE OF GRAPES STEADY AT 2009 QUOTES. WHITE GRAPES ARE BETTER WHILE MARKET FOR REDS IS SLOW. DEMAND MAY EXCEED PRODUCTION OF GUARANTEED 2010 HARVEST

Grape harvesting is now in progress but the price of grapes still remains low, at 2009 quotes. There are obviously some exceptions and some signs of increase though this year’s grape harvest is not particularly abundant. This is the scenario from an investigation carried out by WineNews, which looked at the grape market trend now that harvesting is in full swing.

Measures to combat over-production, needed due to the market crisis, seem to be less efficient for the 2010 harvest. The main measure was European Community resources that financed organic grape harvesting and has proven not really successful, except in Sicily, where it seems to have worked. Abandoning little or totally not suited vineyards together with vine extractions has led to a decrease in quantity in several areas estimated at 25-27% over 2009. The 2010 vintage production will be somewhat lower and the causes are weather conditions that have affected almost the entire country, revealing even the possibility of a shortage of raw materials, which to some extent could benefit the grape market.

In Valpolicella, the Consortium made it known that the prices of grapes for the 2010 vintage will remain constant or even slightly increase over 2009 (between 1.55 and 1.75 euros per kilo). But at the moment, this appears to represent an exception for “reds” because from north to south the market for red grapes still seems extremely slow, if not almost non-existent.

In the Chianti Classico area, the price of a ton of grapes suitable to become Chianti Classico wine is between 70 and 75 euros, more or less the same price as in 2009. The price of a ton of grapes suitable for Chianti wine is about 40 euros, somewhat less than in 2009. The rare and sporadic negotiations of prices for Brunello di Montalcino grapes are around 150 euros a ton, which is in line with the 2009 prices and similar to the Piedmont region for Nebbiolo from Barolo (150-170 euros per ton). In Sicily, the international varieties (Merlot and Cabernet Sauvignon) cost the same as in 2009 about 35-40 euros, while Nero d’Avola costs between 25 and 30 euros per ton. The market for white grapes is a bit better. Prosecco and Moscato get attractive prices (around 9 euros, and in some cases, even a bit more per kilo), but they are the most obvious exception. The situation for the trendiest whites like Passerina, Pecorino or Vermentino is not bad, however, it cannot be generalized. The native Sicilian whites, for example, are going for about 20 euros a ton (lower than in 2009) while the international grapes, like Chardonnay remain the same as last year’s quotes at 35 and 40 euros.

We can, therefore, realistically say that current prices are steady or slightly lower compared to 2009, but they could increase together with the strength of the market if the demand for grapes, as many reports suggest, is higher than the quantity guaranteed by the 2010 vintage.

We, however, must remember that the offer still remains dangerously higher than the demand; private grape producers will have difficulty in placing their crops. The historic buyers and large bottling companies may buy more later on to obtain better prices, or worst case, may prefer to purchase wines directly to reduce risk and costs. And, “dumping” negotiating is always just waiting around the corner.