In its quarterly report on the wine market, Rabobank said global wine exports are generally picking up at a “brisk pace” compared to the start of last year.
France and Spain led the pack with value increases of 20.7 per cent and other major exporters, including Italy, Chile and Argentina also enjoyed double digit growth.
New growth sources
Rabobank said these countries have achieved such strong figures by looking beyond the biggest import markets.
“For many exporters, growth is coming not from the major markets such as the UK and the US but rather from secondary markets such as Canada; emerging markets such as China, Brazil and South Korea; or from regional markets such as Mexico in the case of Argentina, or Kenya and Nigeria for South Africa,” stated the report.
Despite the positive global picture, there were some notable exceptions. South Africa, Australia and New Zealand all experienced substantial declines in export volumes in the first quarter. The strength of their domestic currencies played a big role in depressing the export numbers.
Wine production declines
Meanwhile, on the supply side, Rabobank said a global oversupply situation continues to ease as wine production falls and stocks are depleted.
The bank explained that vineyards in the US, Argentina and China have not yet expanded enough to make up for reductions in Europe.
And bad weather in many important wine producing countries has limited any supply growth. This year, low rainfall in Europe and extreme weather conditions in the US are likely to constrain supply from these big producer regions.
In this environment, bulk wine prices are increasing steadily. Rabobank said they have been on the rise since September 2010 across regions and varieties.
“This bodes well for the industry in general, and for growers in particular, but in the short term, rising bulk prices have added to margin pressure for many wine companies,” added the bank.