While water reserves are finally being replenished in South Africa’s Western Cape region and in South Australia, drier than-normal winters are being experienced in Argentina and Chile for a second successive year as two record-breaking summer heatwaves hit winegrape crops in Europe this summer.
In introducing the latest Global Market Report by Ciatti Global Wine & Grape Brokers, dated August 2019, Ciatti’s Robert Selby says bulk wine markets, so far, remain unmoved by the dry conditions, cautioning that this time of year is “always a dubious yardstick to judge activity levels by” primarily due to the northern hemisphere holiday season.
Selby says grape prices in Chile in 2020 could rise due to the lack of rain in the country over the past two years. He explains that in Valle Central rainfall has totalled 135 millimetres so far in 2019 compared with over 480 millimetre in a normal year at the same time. Yet, bulk wine prices there and across the world are stable, he says, and are largely expected to remain so.
“The stability of prices in the recent past and looking ahead suggests a reasonable level of confidence among buyers that they can secure the wines they need if they go looking for them. South Africa, for example, has lost market share as buyers successfully seek alternative sources; buyers currently enjoy some elbow room to be choosy about quality. Thus the global market as it currently stands is probably in a balanced to slightly long situation, with no sign anywhere of panic from buyers, only some sellers,” Selby notes.
He says the “seller nerves” were mainly being experienced in California, where inventory is “significant” and the latest harvest is imminent, and in South Africa, where pockets of availability on most varietals have “belatedly popped up in recent weeks, often too late for international buyers who have already switched to elsewhere, such as Argentina or Spain”.
“For the first time in a while, there are opportunities to be had on the Western Cape’s bulk wine market,” Seby says.
“There are also significant carryover stocks in Spain – most of its generic white wine and basic reds – and in Italy. Spain’s ongoing drought, however, is expected to clip as much as 30% off the coming harvest in some areas of La Mancha, while Italy’s crop is also expected to be down in size on last year.”
Selby says the latest estimates would indicate France’s 2019 harvest could be its second smallest in five years.