Jul 13, 2012
Global wine stocks are at their lowest point of
the past decade, and the industry has moved closer to balance after many
years of widespread oversupply pressures, according to Rabobank’s
latest Wine Quarterly Q2 report.
The report suggested that
changing exchange rates continue to shift the competitive positioning of
different countries and the economic problems put pressure on demand
and constrain market pricing.
“Rising grape and bulk wine prices
are good news for many suppliers who have lacked profitability in recent
years,” the Rabobank report stated.
“As the balance of power
subtly shifts in the supply chain, however, it is creating margin
pressure on wineries that are finding it difficult to pass on the cost
increases to consumers in the current environment.”
In the US the
wine grape market remains tight, as Rabobank reported: “prices have
risen quite dramatically, leading many wineries to take measures to
secure supply, either via attractive long-term contracts with growers or
through acquisition/expansion of vineyards.”
Initial reports on
the production season in California indicate that the crop is currently
expected to be above average, which would be welcome news for many
The 2012 European grape crop appears to be off to a relatively good start despite some storm damage, with “the effectiveness of the EU supply rationalisation measures still coming under intense scrutiny.”
Australian harvest has been estimated at 1.66 million tonnes, up 4% on
the prior year and generally viewed to be of a high average quality.
wine production recovered by 7% from the rain-affected 2011 harvest,
while white wine production remained much the same as the prior year.
New Zealand harvest has been estimated at 269,000 tonnes, down 18% on
the prior year. Production in the Marlborough region, which contributed
around 70% of the crop, was even more restricted (-23%).
South African wine grape crop appears to have come in much larger than
expected (1.3 million tonnes) a 3.5% increase over the 2011 harvest.
While the Argentine grape crop suffered from hail, high winds and
drought this year, leading to a 22% decline in production compared to
the 2011 harvest.
In terms of forecasts for the future, Rabobank
pointed to “troubles in the eurozone remain the primary influence on the
direction of global currency markets for the time being.”
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