Warm inland regions pressured by surplus and disease

Ciatti has released its Global Market Report for February 2024, with areas of both Australia and New Zealand expecting reduced production volumes.

Ciatti acknowledged the pressures on Australia’s warm inland regions and noted that subsequent volume reductions in harvest would likely be due to yield capping. The expectation of hot and dry weather predicted in relation to El Nino left many growers disappointed with January’s sporadic rainfall, and the report noted that growers were now understandably hesitant to trust weather predictions.

“Australia’s inland warm-climate Chardonnay and inland red grape yields appear to be down from the average, the latter partly due to yield caps imposed by wineries. With red wine inventory remaining, red grape pricing is experiencing downward pressure. Australia’s total wine export volumes were down 3% in 2023; bulk exports were up 3%.”

“Inland warm-climate Chardonnay volumes appear to be slightly down – by approximately 10% – versus an average year, but up versus the 30-40% reduction in 2023. Inland red grapes also look to be somewhat down in yield – a reflection of disease pressure, yield caps imposed by wineries and those cutting back on surplus stock. Unsurprisingly, red grape pricing is experiencing downward pressure as an increasing number of grape growers seek homes for their material at a sustainable price.”

In contrast, New Zealand is reportedly expecting a “favourable” reduction in vintage for Marlborough. The country is expected to experience a reduced crush compared to vintage 2022 and 2023, with Ciatti noting that Marlborough’s crop could be down by as much as 20%.

The report noted that Australia was “still hopeful” of a trade resolution with China, which some suspect could occur in March before the Australian government resumes its case with the World Trade Organisation, although the Chinese government’s review period may not conclude until November.

“Even if trade lines open, recent statistics show a significant drop in total wine imports into China over the past six years. Some 730 million litres of wine were imported into China in 2018; this figure had fallen to 249 million litres in 2023 – the majority bottled product. China is experiencing an increase in spirit consumption, notably of brandy.”

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