Jul 23, 2012
Global wine stocks are at their lowest point of the past decade,
thanks to below-scale harvests in many of the major wine-producing
regions, as well as rising grape and bulk wine prices, according to the
Rabobank Wine Quarterly.
After many years of widespread
oversupply pressures, the latest report claims the industry has moved
closer to balance, with global wine inventories showing signs of gradual
The news has been welcomed by suppliers, who have
lacked profitability in recent years. However, wineries are still
feeling the pinch, according to Rabobank, with margin pressures mounting
and difficulty in passing on the cost increases to consumers in the
In its Wine Quarterly, Rabobank reported
there has been very little bulk wine available in the US and prices have
risen dramatically, leading many wineries to secure supply via
long-term contracts with growers or through the acquisition or expansion
Although it's early days for the Californian
production season, which is just getting underway, initial reports
suggest the crop is expected to be above average, which Rabobank says is
"welcome news for many wineries".
In the European Union, with
the exception of France, which has suffered some storm damage, the 2012
grape crop appears to be "off to a good start", according to Rabobank.
EU regulatory bodies have also acknowledged the counter-productive
impact of investments made to enhance vineyard productivity, as well as
the high incidence of illegal vineyard planting activity in some member
Meanwhile, the Australian harvest has been estimated at
1.66 million tonnes, up 4% on the previous year. It is generally viewed
to be "of a high average quality", Rabaobank adds, with red wine
production recovered by 7% after heavy rain affected the 2011 harvest
and white wine production remianing the same on the previous year.
2012 harvest is the third consecutive below-scale harvest in Australia,
according to Rabobank, which has brought about the first significant
rise in grape prices for many regions since 2008. Average grape prices
increased around 10% to 20% in warm inland regions and key red
wine-producing regions temperate climate regions across South East
In New Zealand the harvest has been estimated at
269,000 tonnes, down 18% on the previous year. Across the country,
variations in size and quality vary widely, with production in
Marlborough down 23% but of good quality, while Hawkes Bay is down 8%,
Gisbourne up 8%, Nelson down 22% and Otago up 14%.
The wine grape
crop in South Africa has come in much larger than expected at 1.3
million tonnes, which represents a 3.5% increase over the 2011 harvest.
Whereas in Argentina, hail, high winds and drought have led to a 22%
decline in production with the lowest value varieties, such as Criolla,
Chile has seen a healthy wine grape harvest with estimates suggesting a production increase of around 5% over 2011.
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