Chilean Vines Recover from Drought

By Luis Hennicke

The sizable increase in Chile’s 1997 wine grape harvest reflected not only the end of a three year drought but increased planted areas coming into production. At $428 million, the value of export sales in 1997 was up 45 percent from the year before.

The extra 7,000 hectares added in 1998 brought the total land area planted to wine grapes up to 63,000 hectares,¹ a 13-percent increase. Of this amount, an estimated 34,000 hectares is planted to export-quality varietals.

First quarter sales for 1998 point to at least a 20-percent jump in exports for 1998. By 2000, wine exports are expected to reach $680 million, with a volume of 350 million hectoliters.²

Favorable weather conditions and increased wine grape acreage, however, weren’t the only factors in a larger wine grape output in 1997. An oversupply of table grapes, which ended up in the wine vat due to their bargain prices, also contributed to the upswing.

In 1998, more new vines entered production, but surplus table grapes weren’t available.

Chile exports both bottled and bulk wine. Bottled wine export volume has increased 30 percent yearly for the last three years and is expected to continue the trend. Labeled wine represents 46 percent of total wine exports.

With bottled exports to the United States and United Kingdom headlining Chile’s exports to over 100 countries, Canada was Chile’s largest bulk wine market in 1997.

But in 1998 Japan suddenly became a much bigger customer for Chile. Exports of wine to Japan jumped up over 700 percent from the previous year, and when the final numbers are in, that country will probably have ended up among Chile’s top three markets in 1998.

Along with the increased sales, Chile’s export prices also rose--20 percent during 1997--reflecting the improved quality of exported Chilean wines.

The Chilean Wine Exporters Association has predicted that export sales in 1998 will reach $500 million, almost a 20-percent increase from 1997.

¹ 1 hectare = 2.47 acres.
² 1 hectoliter = 100 liters.

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The author is an agricultural specialist with the FAS Santiago Office of Agricultural Affairs. Tel.: (562) 330-3313; Fax.: (562) 330-3203.

Last modified: Thursday, October 14, 2004 PM