The latest quarterly study by banking group Rabobank, published yesterday (9 October), found that global inventories of commercial wine are at their lowest point in over a decade. And, the report says, stronger grape and bulk wine pricing in many markets means the industry is much closer to balance.
In Europe, the predicted reduced harvest will further tighten supplies but may also allow the market to eliminate unsustainable sales, the Q3 report says.
“This shift towards a more balanced - and potentially tight - supply position is changing the dynamics of the global wine industry,” Rabobank added.
The study suggests that wineries are facing less pressure to compete at lower price points in the market, pointing to a shift in “negotiating leverage” in favour of producers.
But, Rabobank added: “Looking forward, the significant declines forecast for European production will likely help to keep bulk prices strong across most regions, and may lead to incremental price increases across some regions.”
The report says that the effects of tightening global supply will not be felt evenly. “Markets that currently pay the lowest average prices for bulk wine will be outbid by those that pay higher prices, and their volumes can be expected to decline,” Rabobank said.
It added: “Western Europe, Russia and some of the emerging markets (excl. China) are likely to see declines in imports (and therefore consumption). Western European wine exports should see declining volumes in 2013.”
