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Global bulk wine market opens up says Murphy Wine Company

Published:  01 November, 2013

Buyers are currently experiencing a certain sense of relief as the global bulk wine supply has opened up and created a slight breathing space.   Big harvests this year in the Southern hemisphere helped relieve the pressure from the losses of the 2012 European harvest.  The 2013 Northern hemisphere harvests are indicating  a return to average crop levels in Europe, and California is set to have another big crop which will help to continue the trend.


Australia had a big harvest in 2013.  They crushed 1.83 million tonnes, 10% above last year and well above the six-year average according to the Winemakers' Federation of Australia.  However, total wine exports for Australia have been falling steadily since 2007, the WEAR announced a drop again this year by 2.1%.   This has led to an oversupply of wines from Australia, and with a more favorable Australian dollar exchange rate, pricing has been coming down.


Chile has had two consecutively big harvests.  Despite the media surrounding the recent frost in September this is unlikely to have a major effect on the downward spiral of pricing.  The frost affected mainly the fruit trees such as cherries and kiwis.  The vineyard was less affected; only Chardonnay and small areas of Merlot sustained any major damage.  Current stock levels are high and there is a real need to clear volumes in the next few months.

South Africa

South Africa also had a big harvest for the second year running.  The continued demand for generic white and rose wines to replace the losses from Europe has meant that stocks are in balance.  The pricing from Europe this year will determine whether we see a decrease in pricing from South Africa next year on generic white and rose wines.


California is looking at a big crop for the second year in a row.  The harvest started early and has been challenging as the warm weather has led to many varieties ripening at the same time.  There have been some heavily discounted spot market offers for grape tonnages that are in excess of contract specifications.    However, consumption levels in the USA are still way above their production capacity and therefore they are still a major importer.


After a delay of two to three weeks the European harvests are almost complete and volumes are up after the disastrous harvests of 2012.


According to the latest Agreste update, the French harvest will be approximately 44.1 million hl.  This represents a 7% increase on the 2012 harvest, although they are still below the average of the last five years.   Pricing out of France is unlikely to drop, in particular for white wines and ros?s where inventories are low.  The South West of France, a major white wine production area is estimating that their harvest will be down 11% on last year.  Bordeaux and the Rhone Valley are also announcing decreases of 19% and 6% respectively. 

The shortages elsewhere in France will hold the price steady from Languedoc Roussillon, where an increase in production of 10% is expected.


Italy is estimating an increase of approximately 14% on the 2012 crop.  After a delayed start to the harvest of about two  weeks, Coldiretti is predicting that white wine production will surpass the red wines.  However, stocks of red wines are still readily available, especially from Abruzzo.  Prices are likely to decrease for both reds and whites going forward.


Spain is looking at a record breaking harvest.  With the latest estimates at around 48 million hl they are now the world's largest producer of wine and must, ahead of France and Italy.   Pricing has already decreased dramatically on last year's pricing.  The question is how low will it go before the supply tightens and pricing bounces back? 

The world wine production is having a welcome respite this year, but this pocket of air is only temporary.  Global wine consumption has stabilized over the last four years against a steadily declining production.  The industrial demand for wine (brandy, vinegar, etc) is what will tip the scale.