Prospects and Predictions for Mexico's Fresh Grape Market in 2024

Current Market Overview

Mexico's fresh grape industry has grown steadily in recent years, cementing its position as Latin America's biggest producer and exporter. In 2023, Mexico produced around 400,000 metric tons (mt) of grapes, with significant exports to the United States (US), Canada, and Europe. Sonora, Baja California, and Zacatecas are the three central grape-producing regions, with Sonora accounting for the bulk of the production.

While Mexico's grape-growing regions have pleasant conditions, erratic weather and climate change influence production considerably. Extreme weather occurrences such as droughts in 2021 and 2022, severe storms in 2023, and temperature variations all harmed fresh grape production and quality in Mexico.

Mexican trade accords, such as the United States-Mexico-Canada Agreement (USMCA), make it easier to export fresh grapes by lowering trade barriers and taxes. These agreements make Mexican grapes more competitive in international markets. On the other hand, labor is essential for grape picking and processing. Labor shortages or increasing labor expenses can influence productivity and profitability. Therefore, having a stable and trained staff is critical for market survival.

Forecasts for 2024

The planted area for the 2023/24 season is estimated to be around 24,000 hectares (ha), a 2% year-over-year (YoY) increase from the previous season. Challenges hindering significant growth include farmers' limited financing for adopting new grape varieties or implementing water-saving technology to address drought and climate change issues. Also, farmers are considering switching to more profitable horticulture crops due to rising input prices for grape production. In contrast, table grape growers often cultivate other vegetables and fruits, such as tomatoes, peppers, squash, asparagus, and watermelons.

Mexico's 2024 table grape harvest season has begun up to two weeks earlier than last year, according to Agrofesa’s CEO. Early red and white grape varieties are over two weeks ahead of the previous year, while mid-late season varieties are roughly ten days ahead. Mexico's fresh grape production is predicted to increase further in 2024. Due to favorable weather conditions and sophisticated agricultural practices, production could exceed 420,000 mt.

Figure 1: Mexico Import Value of Fresh Grapes in 2023

Source: Tridge

Mexico's fresh grape imports are expected to be around 131,000 mt in marketing year (MY) 2023/24, slightly higher than MY 2022/23, according to the United States Department of Agriculture (USDA) estimates. Despite marginally increased domestic supply, there is limited room for market growth. Mexico's demand is also restrained due to high import prices and lower purchasing power among consumers. Mexico is consistently the second-largest market for US table grapes, following Canada. Table grapes are largely imported through the Nogales and San Diego customs districts, as all US exports to Mexico originate in California, similar to how fresh apples are imported.

Mexico's table grape exports to the US mostly pass through the Nogales area, as Sonora produces the most exportable grapes. In 2023, Mexico's exports were 209,500 mt, nearly unchanged from the previous year. Exportable supply remains constant, as output and consumption are expected to be similar to the prior year. Mexico exports 99% of its table grape production to the US, with only a small amount going to Japan.

Nevertheless, Tridge expects the export market for Mexican grapes to expand further in the coming years. While the US will remain the principal destination, efforts to expand into new markets in Asia and Europe will accelerate. The increasing demand for fresh and healthy produce in these regions creates considerable prospects for Mexican traders.