RIO de JANEIRO, May 14 — When the Portuguese winemaker João Santos first viewed his company's new vineyard in Brazil, he was crestfallen. How could he ever produce wine anywhere nearly as good as that made in Europe? The trouble was the palm trees.

"Wine and coconuts," Mr. Santos, director of the Dão Sul vineyard, said with a chuckle in a phone interview from Fazenda Planaltino in northeastern Brazil. "One is completely different from the other. Palm trees you find by beaches. Wine comes from France, Italy, Spain, where they don't have palm trees. Making wine here didn't seem to make sense."

Today, four years after Dão Sul purchased land with some grape vines in Brazil's semi-arid desert just south of the Equator, it all makes perfect sense. Thanks to hard work, better technology and hundreds of miles of irrigation pipes snaking in from the nearby São Francisco River, Dão Sul has overcome the coconut conundrum and produced one of the most successful tropical wines yet.