A report from Rabobank, the influential Dutch-based international bank which specialises in food and agribusiness, states that while the Chilean wine industry has been badly affected by the earthquake in February, it is optimistic that it can recover and exports should not be affected.
The Rabobank Industry Note 237-2010, is titled: “Chilean Wine Industry After the Earthquake – Shaken but Still in the Race”.
Initially Vinos de Chile estimated loses at 125 million litres, valued at US$250m. A further assessment increased losses to $430m as the Maule valley, which accounts for nearly half of Chilean wine production, was the worst affected due to it proximity to the epicenter.
With the 2010 harvest currently underway, a 15% decrease on the large 2009 crop (986m litres, up 14% on 2008) is predicted, according to Rabobank. The decline is due to spring freezes and a cool summer rather than the earthquake. Nevertheless there are concerns over irrigation supplies which have been disrupted by damaged infrastructure such as the canal system. Also there are shortages of labour as people have been drawn into reconstruction.
Rabobank believes that while Chile should be able to meets its forecasts, they will be additional costs which are likely to lead to a “deterioration of competitiveness”.
“The industry as a whole seems optimistic and firm in its decision to continue on the road to strengthening its presence in the world markets,” it concludes.