- The wine grape harvests in the Northern Hemisphere are winding down and, in principle, are estimated to be on course.
- Pricing is yet to be set on much of the 2022 vintage, prices being relatively stable for the moment.
- The Southern Hemisphere suffers from some above average rainfall.
- The bulk market shows stable-to-softening pricing on many wines, container prices trending downward and shipping reliability improving.
Harvests in the Northern Hemisphere
The major grape harvests in Europe, France (44 million hectolitres) and Italy (50 million hectolitres) are estimated to be on course for average-sized crushes while Spain’s (36-37 million hectolitres) appears short. A large carryover inventory of Spanish red wines, however, ensures that – together with the good-sized French and Italian crops – supply levels on most wines are unlikely to stimulate a buying frenzy.
Compromises in Pricing
Pricing is yet to be set on much of the 2022 vintage. With the Languedoc’s picking timetable in advance of a normal year, its 2022 white varietals are already being keenly sampled by buyers lacking carryover after the short 2021 crop. Pricing appears to be a compromise: up versus 2020 due to increased input costs in the intervening two years, and down versus 2021 due to the greater availability. Pricing on 2022 Spanish and Italian wines will potentially commence in line with 2021’s.
A relative stability in pricing is the natural compromise, as the upward pressure of input costs is offset by the downward pressure of slow sales – real or expected. As our South Africa page says this month: “With the global economic situation in such flux – inflation, rising interest rates, falling but still elevated freight prices, fears of a consumer slowdown – buyers are naturally hesitant, keeping a close eye on retail sales and weighing-up different sourcing options.” Many bulk buyers have purchased conservatively through 2022 to avoid the risk of sitting on excess supply if consumption falls, or to allow time for contracted wines to work their way through a dysfunctional supply chain. This is unlikely to change at least until the key final-quarter sales can be assessed.
Meanwhile, winter and early springtime conditions in Argentina, Chile, and South Africa appear to have been conducive for at least average-sized crops in 2023, with a third-successive year of La Niña’s influence on Australia and New Zealand – i.e., above-average rainfall – currently the only big Southern Hemisphere concern, weather-wise. Chile’s 2023 grape prices, originally expected to remain in line with 2022’s, have started to soften due to a pull-back in grape demand; Australia will continue to have large red wine inventory unless the country’s relationship with China radically changes; Argentina’s Malbec availability is high and prices are softening.
Attractive price-quality opportunities on the bulk market
There is some understandable gloom about what 2023 might bring economically, but on the bulk market we see stable-to-softening pricing on many wines, container prices trending downward and shipping reliability improving, and weak currencies versus the euro and US dollar – i.e., conditions conducive for international business. Bulk markets are – and will be – offering attractive price-quality opportunities and all sorts of possibilities for enterprise: organic wines of all colours from France and Italy; excellent-quality French AOP reds; southern French white varietals; Australian varietal reds; Argentinian Malbec of every quality tier; South African varietal reds, Chenin Blanc and floral whites; price-competitive Spanish and Italian grape juice concentrate, etc.
Ciatti is here to help buyers and sellers defy the gloom and harness the market’s opportunities: don’t hesitate to get in touch!