World wine production runs low

PARIS - Reuters

Hit by weather and EU curbs, overall wine production in the world has fallen by 6 percent in last year. Reuters photo

Global wine production fell sharply last year due to bad weather in Europe and a recent policy to drain its “wine lakes”, while Chile and United States saw a jump in harvests, according to a report.

The International Organisation of Vine and Wine (OIV) said world production was down around 6 percent in 2012 at 251 million hectolitres (Mhl), a level it described as very low. European Union output fell 10 percent to 141 Mhl, with France suffering a drop of nearly 17 percent after a good harvest in 2011.

“We had a difficult year 2012, mainly because of a sharp drop in production, but trade flows mostly held stable,” OIV Director General Federico Castellucci told reporters, referring to total wine exports which were stable at 101 Mhl after a long-term upward trend.

The EU policy of digging up vines to end years of surpluses had lead to a reduction of 269,000 hectares between 2008 and 2011, well above the targeted 175,000 hectares, contributing to a recent rise in prices, Castellucci said. Rising consumption also helped push prices up.

“This meant tightness on the market and we need to be careful because once a market is lost it is hard to conquer it back,” he said, pointing to higher prices for bulk wines, used to make liquors such as brandy and vermouth or vinegar.

Prices for French bulk red wines gained 7 percent between August and February, while bulk white wines rose 30 percent, data by French farm office FranceAgriMer showed.

French exports rose 6 percent to 15 Mhl, but Italy and Spain, the world’s two largest wine exporters by volume, which also had a poor crop although not as bad, saw their exports fall 7 and 13 percent respectively to 21.5 and 19.1 Mhl.

Chile, the largest South American producer that had a record output in 2012, saw a 13-percent rise in exports to 7.5 Mhl. South African exports were up 17 percent to 4.2 Mhl, with sales to Britain jumping 50 percent.