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SA is set for a steep decline in wine production in 2018.
SA is set for a steep decline in wine production in 2018.

SA wine production declines steeply — but global wine consumption is steady

ECONOMIC NEWS

BusinessLive - Apr 24th 2018, 15:43

SA is set for a steep decline in wine production in 2018 as the country grapples with a water crisis ravaging Cape Town and surrounding areas, a Paris-based global organisation said. 

Africa’s top wine producer is set to produce 8.6-million hectolitres of wine this year, down 20.4% down from 2017, the International Organisation of Vine and Wine (OIV) said in a statement. A hectolitre represents 100 litres, or the equivalent of just more than 133 standard 750 ml wine bottles.

The Western Cape region has gone without significant rains for more than three years, forcing Cape Town to slash residential water consumption. While cautiously welcoming the water shortage’s impact on improved grape flavours, South African winemakers have been struggling with the drought, which has sown panic across the Cape Town area.

Southern hemisphere

More broadly, overall production in the southern hemisphere is set to remain stable at about 52-million hectolitres — only a marginal change from last year.

Argentina, the world’s sixth-biggest producer, will see its production rise 14.2% to 13.5-million hectolitres. Chile, also a rising star in the world of wine, is set to see a 19% rise to 11.3-million hectolitres. Australia, the world’s fifth producer, will, however, see its production dip 8.7% to 12.5-million hectolitres.

Global output

Global wine output fell to its lowest level in 60 years in 2017 due to poor weather conditions in the EU that slashed production in the bloc, OIV said.

Wine production totaled 250-million hectolitres last year, down 8.6% from 2016, data released on Tuesday showed. It is the lowest level since 1957 when fell to 173.8-million hectolitres, OIV said.

All top wine producers in the EU were hit by harsh weather last year, which led to an overall fall in the bloc of 14.6% to 141-million hectolitres.

The OIV’s projections, which exclude juice and must (freshly pressed grape juice), put Italian wine production down 17% at 42.5-million hectolitres, French output down 19% at 36.7-million and Spanish production down 20% at 32.1-million.

The French government said last year that production had hit a record low due to a series of poor weather conditions, including spring frosts, drought, and storms, that affected most of the main growing regions including Bordeaux and Champagne.

In contrast, production remained nearly stable in the Us, the world’s fourth-largest producer, and China, which has become the world’s seventh largest wine producer behind Australia and Argentina.

Global consumption

The OIV confirmed a historic drop in production triggered by unusually long winters in the world’s top three winemakers — Italy, France, and Spain. But in more positive news, in a sign that wine lovers may have finally put the global financial crisis behind them, global consumption stabilised in 2017.

"The downturn in the consumption of historic consumer countries — France, Italy, and Spain — appears to have stabilised, while consumption in the US, China and Australia continued to increase," the OIV said in a statement.

Global wine consumption edged higher at about 243-million hectolitres in 2017, up 1.8% from a year earlier. The US confirmed its position as the largest world wine consumer with 32.6-million hectolitres, followed by France at 27-million.

Chinese wine consumption rose significantly for the third year in a row with an increase in 2017 of 3.5% at 17.9-million hectolitres.

On the export market, Spain remains the largest exporting country by volume with a global market share of 20.5%, while France keeps its leading position in value with €9bn worth of wine exported last year.

Global exports totaled 107.9-million hectolitres in 2017, up 3.8% on the previous year, and €30.4bn in value, an increase of 4.8% on 2016.
© BusinessLIVE MMXVIII 

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