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Global wine exports reach record high

Published:  03 May, 2022

This year 2021 saw a partial recovery of global consumption after the doldrums of 2020, the OIV said in its latest update. However, 2022’s outlook is looking increasingly uncertain due to the turbulence posed by the global supply chain crisis, the war in Ukraine and mounting energy prices.

Last week, Pau Roca, director general of the OIV, shared updated predictions for 2021, including worldwide exports, which looked remarkably more upbeat than the year prior. Wine exports enjoyed a “boom” in international sales in 2021, which registered a record high in both volume and value, and thus replaced some of the stability which was pulled away with 2020’s loss of the global on-trade.

“After a year of major trade disruptions world over, the lifting of restrictions due to the Covid-19 pandemic has set the world wine export market on its path to reconciliation,” Roca said.

“With a volume of 111.6mhl, the largest exported volume ever recorded in history, world wine exports in 2021 have increased by 4% compared to 2020, and have boosted even more in terms of value, with €34.3bn, registering a yearly increase of 16%.”

In 2021 however, the pandemic was certainly not over. Consumption saw marginal growth, up 0.7% to 236mhl when compared with 2020. This growth managed to invert a negative trend that started in 2018 with a decline in China’s consumption. However, it was the lowest level of growth recorded in world wine consumption levels since 2002.

Production, excluding juices and musts, also saw a downturn. In 2021, world wine production is estimated to sit at 260mhl (-1%) – the third consecutive year where production has fallen below the ten-year average.

This is the result of two contrasting trends that balance out at the world level, the OIV said: the sharp fall in some of the major EU wine producing countries, such as France and Spain; and then the record-high harvests of the Southern Hemisphere.

The OIV’s figures also included the first estimates for 2022 in the Southern Hemisphere. In the south, a decline in wine production for 2022 is expected overall – “not necessarily bad news”, said Roca.

“This fall recorded is due to the extremely high wine production levels seen in 2021 and this year, we expect harvests to return to their long-term averages. With the exception of New Zealand and South Africa, all other major Southern Hemisphere wine producing countries are expected to decline their 2022 production levels.”

Now, in 2022, evolving market dynamics continue to keep the wine world on its toes.

The war in Ukraine for example has instigated a new series of supply-chain bottlenecks. Along with a surge in Covid cases in China, which led to temporary lockdowns in parts of the country, the war in Ukraine is putting unprecedented pressure on the global energy market. Moreover, the sanctions imposed by the EU on Russia are also adding pressure to the market, which was already experiencing price rises in 2021. Russia is the tenth largest wine importer in the world in 2021 (accounting for about 2% of the world imports) and the eighth largest wine market in terms of sales value.

“The war is affecting energy prices, and this impacts inflation. Inflation was already there when we came out of the pandemic, and now there is the issue that Ukraine and Russia supply a lot of raw materials. Containers have multiplied by twenty times in price, while pallets have increased seven or eight times,” Roca said.

The wine sector overall, however, has proved to be more resilient than other sectors. It was quick to adopt innovative technological solutions such as ecommerce to cope with lockdown measures. The new challenge in 2022 is to see how the sector will cope with this new situation, where global supply chain patterns have to be reconsidered and energy prices continue to squeeze consumers.