Subscriber login Close [x]
remember me
You are not logged in.

‘Stable’ global wine inventories likely to tighten in 2017 against backdrop of worldwide value growth

Published:  26 July, 2017

Rabobank’s Q3 Wine Report has revealed that global wine inventories are in the main “balanced to slightly tight”, while bulk wine prices for most varietals are “stable or rising”, with 2017 hail and frost damage in European vineyards likely to further impact on these continuing trends when set against a coming shortfall in this year’s northern vintage.

The Report indicates that overall global consumption is stagnant, but that this masks significant changes as demand continues to rise in new markets, while consumption of wine in traditional European markets continues to fall as consumer drinking patterns evolve.

In the EU, which accounts for 65% of global production and 70% of global exports, well-documented frost damage in April across many areas of production in France, Spain and northern Italy is highly likely to lead to reduced volumes and subsequently potential price rises.

The Report predicted, however, that existing stocks across many of the EUs best-known regions of production are high enough to ensure adequate availability to meet immediate demand.

In the southern hemisphere, despite a rise in production of 9% and 10% respectively in Chile and Argentina, these figures come on the back of relatively low volume harvests, with the Report suggesting that inventories remain under pressure.

Meanwhile, Australia and South Africa produced slightly more juice in 2017 than 2016, though New Zealand’s modest production fell slightly, with overall prices from the south also predicted to rise.

In terms of the biggest winners and losers for global exports from January to March 2017, France (+5.9% volume, +14.7% value), Chile (Jan-Apr: +4.9% volume, +8.2% value), Italy (bottled wines only: +2.0% volume, 5.4% value and Spain (0.1% volume, 8.9% value) increased both in volume and value, with South Africa also experiencing a big jump in volume (Dec-May: +11.2%) but with no value figure available.

The US lost volume but managed to grow value (-15%, +8%), while Australia similarly grew value off lower volumes (-1.6%, +13.1%), while Argentina suffered both volume and value reduction (-2.2%, -14.8%).

Across the board, the Report stated that bulk white wines appear to be presenting the biggest price increases, with global prices for popular varieties such as Cabernet Sauvignon also on the rise.