There’s no denying that the bulk wine trade is getting bulkier, or its importance to the global wine trade. But with the 2016 harvest yielding smaller crops, fluctuating prices and predictions of a global shortage, who is winning the battle of the bulk?
Bulk wine “Flexitank”
In 2015, global bulk wine exports reached a record 36.3 million hectolitres – a 3% increase on 2014 – but dropped in value by 13.7% to US$3.1 billion, according to Italy’s Il Corriere Vinicola.
While high volumes kept prices relatively low for buyers in 2015, 2016 has, to some extent, seen the pendulum swing in the opposite direction, with a smaller harvest and less supply driving prices up.
In Europe, severe hailstorms in France hit the bulk wine region of the Languedoc, while drought across much of Europe has driven down yields, with France recently reporting on its smallest harvest in 30 years.
In the southern hemisphere, 2016 harvests in Chile and Argentina dropped by 30% and 25% respectively, due largely to the effects of El Nino. Here, the rising price of bulk wine has left international buyers grappling with fluctuations in price and limited supply.
The smaller harvest has led to warnings of a “global shortage” of bulk wine, with Vinex founder Denys Hornabrook predicting in September last year that prices would steadily rise in the next 12 to 18 months.
Today, Vinex’s Global Price Index (VGPI), which combines the major producing countries trading each varietal to determine a average weight price, is reporting a 21% increase in the past 12 months to 1 December, which represents slowing rise on the 12 months to 16 December when it was tracking at 28% increase on the previous year.
While prices are rising, with variations in the rate from country to country, is the outlook at unpredictable as it seems? Should buyers be rushing to secure supply, or are there still deals to be had, for those with the nerve to wait.
The required approach to each market varies from the northern to southern hemisphere, and from region to region, and is constantly shifting. While full export figures for 2016 are yet to be confirmed, and the full impact of the northern hemisphere’s smaller 2016 vintage is yet to be felt, Italy’s Il Corriere Vinicola provides the most up to date snapshot of the industry, collating export stats for the first nine months of 2016, from January to September.
Click through for an insight into the movements of bulk wine throughout 2016, the market’s top five exporters of bulk wine and where the industry might be headed in 2017, or here for a more concise, one-page list.
Source: Wine by Numbers – Il Corriere Vinicole (January to September 2016), Ciatti Global Market Update December 2016