The agricultural sector began harvesting in some of the most important wine-growing areas by volume, such as Castilla-La Mancha, amid the now traditional discrepancies in prices between producers and wineries, with Félix Solís and García Carrión as the main protagonists. Overall, an average rise in grape prices of 15% is handled as a result of a harvest lower than that of last season but above the average, less production in other EU countries and, fundamentally, due to the increase of domestic demand with the opening of the restoration compared to what happened last year and especially due to the increase in exports.
Agriculture recognizes that in the wine sector there has been an improvement in hiring policies and compliance with payment terms, although it warns that sales are always made under contract. At the proposal of the Interprofessional Wine Organization, the Government approved a contract for the sector that entered into force on August 1, with a validity of three years where the obligation to pay 30 days with the grape as a product is contemplated perishable.
The sector recalls, in turn, the obligation of industrialists to pay at least the cost prices as contemplated in the current regulations on the food chain, something that in their opinion does not cover the prices set by the wineries. In the case of cooperatives in Castilla-La Mancha whose members account for more than 60% of a production of 22 million hectoliters, the winegrowers can continue to deliver without price with settlement as a result.
The previous harvest rose to an almost record figure of 47 million hectoliters, a volume that aggravated the situation of the markets due to the collapse of domestic and foreign demand due to the closure of the restoration. This forced the Administration to distill two million hectoliters, to store another 2.2 million hectoliters and to finance a green harvest that would lighten the surpluses at a cost of about 90 million, as well as a limitation of the yields of between 18,000 and 20,000 kilograms of red and white grapes per hectare.
This year, the harvest is lower, but above average, with estimates of between 39.5 and 41 million hectoliters, according to agri-food cooperatives. In addition, there have been important changes in the scenario. In the domestic market, a demand that had fallen more than 20% due to the closure of the restoration has recovered. Export is also playing a key role. Thus, between January and June, sales grew 21% in volume to 9.3 million hectoliters and 15% in value to 1,230 million. In year-on-year computation, between June 2020 and May 2021, volume sales increased by 8.2% to 21.7 million hectoliters, with a value of 2,757 million euros and a growth of 6.7%, according to the data of the Spanish Observatory of the Wine Markets.
Rafael del Rey, director of the Observatory, highlights the increase both in bulk with price improvements and in sparkling wines and still wines with designation of origin. Among the rising markets, the recovery of sales in the United States or China stands out, while in the most negative part there are declines in countries such as the Netherlands and, above all, in Russia for the sale of bulk due to its new wine law that prevents call the imported product “wine”.
Together with this increase in sales, the reduction in harvests of between 15% and 30% registered in other EU countries such as France and Italy is playing a very positive role in the market, which means the possibility of exporting more to those countries. countries, as well as to and take their place in exporting to their markets.
As a result of all this, at the beginning of the harvest, in the areas where the harvest has begun, such as Castilla-La Mancha, the average prices have registered an average increase of 15% over those paid in the previous harvest than the winegrowers. they consider insufficient as they do not cover production costs. This implies prices of between 0.30 and more than 0.40 euros per kilo of grape for some varieties such as Chardonnay, Merlot or Cabernet, while for others such as Airén, the dominant production in the autonomous community, the average prices are in around 0.15 euros.
Alejandro García Gasco, responsible for the sector in the Union of Small Farmers (UPA) considers that these prices do not cover production costs and that they are at least three cents below.
To the low prices of Castilla-La Mancha, those existing in other important producing areas such as Extremadura are added with 0.17 euros per kilo for whites or 0.22 euros for reds; in Catalonia, the average prices are at 0.33 euros per kilo, and in La Rioja, figures of between 0.60 and 0.70 euros are handled. In Ribera del Duero, the harvest is late and production is down due to the lack of rain and the damage caused by hail in 10% of an area of 24,000 hectares. For this reason, the expected average prices are between 0.70 and 0.80 euros per kilo and above 100 euros for high-quality items.