A severe frost in Chile wiped out an estimated 20 percent of the country’s crop earlier this month, which could reduce the 2014 harvest. However, a leading analyst views that as good news, as lower output in 2014 would help restore balance to Chile's wine industry.
The 2013 harvest was 12.8 million hectoliters, up 3.6 percent compared to the already bumper crop of 2012.
“We’ve seen Chile pull in two record harvests in the last two years,” Marc Soccio of Rabobank told Wine-Searcher. “So they were going into this year with high stocks and they’ve had a big crop again. There’s a lot of wine swishing around South America at the moment."
On the plus side, Chilean wine exports have also seen a big increase since the start of the year – up 33 percent by volume and 7.3 percent in value (Jan–Jul 2013).
“You’ve seen exports rebound quite strongly from Chile and the reason is they have high supply. They had record inventories going into this crop and then they put another big crop on top of it,” said Soccio.
On the downside, with so much wine, the price fetched by Chilean bulk wines has fallen by a dramatic 21 percent in the same period, according to a Rabobank report.
“One of the things that is interesting going into next year, is that Chile has just suffered a very damaging frost in the last few weeks so that might help bring the supply back a little bit next year," said Soccio.
"In the meantime, they have to move a lot of stock.”