southern hemisphere wine yields down

Southern hemisphere wine yields down

Thursday, 22/04/2010

A drop in southern hemisphere grape production is expected to lead to a recovery in global wine prices.

The value of Australian wine exports has fallen by 20 per cent since 2007, due to oversupply and strong competition from cheap producing countries.

But Rabobank's Marc Succio says early 2010 harvest figures show falling yields from all major southern hemisphere producers.

He says that will help Australia's struggling industry.

"What we're seeing in the southern hemisphere at the moment is Chile seems to have a little bit of a lighter crop, they've been impacted by the earthquake that occurred some months ago," he says.

"So I think when you start looking at these exporters in aggregate, 2010-11 might actually be a little bit lighter for supply, notwithstanding what's going to happen in the northern hemisphere, which obviously we don't have a feel for yet."

Mr Succio says bulk wine exports will most likely benefit from the fall in wine grape production.

"Bulk wine prices may shift to some degree given what's happened in the southern hemisphere harvest .... shift upwards (but) it's hard to know to what degree."

But the Rabobank industry snapshot is less positive about Australian attempts to restructure vine plantings.

The Winemakers Federation estimates the industry must remove about 20 per cent of vines across Australia, with the worst hit regions needing to cut production by about 70 per cent.

Mr Succio says the industry is making slow progress and, in many instances, vines are being removed from the wrong regions.

"Most of it seems to be coming in those warm inland regions ... but this is the quandary we're in, that those regions, really their markets are still intact."

"They're very capable of growing into the future when global conditions improve and we're likely going to need that fruit."

http://www.abc.net.au/rural/news/content/201004/s2879834.htm
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