Yahoo Finance Is Australia about to run out of wine?
A combination of growing foreign demand and falling local production means the Australian wine industry could hit a shortfall in 2019, a new report warns.
According to Colliers International, a global real estate company, offshore demand for Australian products like cherries, beef and avocados is on the rise.
The same goes for wine, Colliers said in its Agribusiness 2019 report, warning in its industry outlook that demand “may outstrip supply” in 2019 as production trends and seasonal challenges take effect.
Most of the demand is from China and the UK, with Australia shipping more than $1 billion of wine to China in the year to 30 June 2018, for the first time in history. This demand was in turn led by a growing appetite in China for premium red wine.
And the value of wine exports continues to grow, up three per cent over the same period.
“To put this into context over the same period, Spain exported the equivalent of Australia’s total production in bulk wine exports at two thirds of the price,” the researchers said.
But this follows a “challenging decade” for the Australian wine industry, the researchers added.
The last 10 years saw wine production edge into a glut, forcing producers to sell at below cost.
In response, the industry brought in the Wine Restructuring Action Agenda which had a goal of removing the glut, leading the 2018 vintage to be around 10 per cent smaller than the previous years.
And the expected crop for 2019 is even smaller.
“Generally, less favourable growing conditions in South Eastern Australia will lead to a smaller 2019 wine grape crop compared to 2018,” the researchers said.
“This will increase demand for wine grapes and place upward pressure on fruit prices and vineyard values.”
Make your money work with Yahoo Finance’s daily newsletter. Sign up here and stay on top of the latest money, property and tech news.
