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News
South African export volumes fall, but value rises on price per litre boost
Exports of South Africa saw a 17% drop in volume terms compared to the previous year, the latest data from the Wines of South Africa show, however the increased price paid on a litre of wine helped boost value sales by 0.9% to R10billion (US$540 million).
According the country’s latest export report, volumes fell 17% to 306-million litres, down from 368-million litres in 2022, however the Rand per litre FOB sales rose 21% in total, (22% for packaged wines and 20% for bulk) which counterbalanced the volume declines and helped it hold its overall. As a result, the value of exports rose 0.9% from R9.9-billion (US$540 million) in 2022 to R10billion – a fraction under the R10.2 billion recorded in 2021.
However due to the depreciation of the Rand over the last year, the exchange rate conversion to dollars showed that sales were equivalent to US$540 million – which compared to last year’s figure falsely indicates an 11% fall in value sales.
Wines of South Africa remained upbeat as packaged (ie higher-priced bottled) wine saw an increase of value sales by 1.2% to R7.66 billion on volumes slightly down to 117.1 million litres, while the value of bulk wine fell 0.3% to R2.3 billion, while still accounting for 189.2 million litres.
Last year was undoubtedly a difficult one, with harvest yields down 14% decline in South Africa and “excessive stocks” of wines across the northern and southern hemisphere, particularly of lower and entry-level wines, having “an adverse effect on pricing” across the board, it said. Trading at the lower level was therefore particularly competitive, with pricing at the bulk and commodity sector rippling through the value chain.
However, increasingly positive review of South Africa’s top quality wines had helped fuel the positive growth, the trade body said.
“The consistent positive ratings and accolades achieved by South African wines has most certainly solidified our positioning in international markets,” Wines of South Africa CEO, Siobhan Thompson noted. “Thanks to our unique terroir, our producers are known for making wines that are unique and representative of our rainbow nation.”
“Quality remains our focus and the consistency that we have seen, along with viticultural improvements, embracing new technologies both in the vineyards and cellars, will allow for the continued upward trajectory in this regard.”
Top markets
In terms of its top markets, the UK market saw overall growth of 19% by value, to Rand 2.8 billion (US$152 million), with both bottled and bulk wine values up, by 17% and 22% respectively. This helped make up for overall falls in its second market Germany (-6% to Rand 950 m), the Netherlands (-3 to Rand 730m), the USA (-11% to Rand 707m) and Canada (-15% to Rand 509million) – although the USA did see a 4% growth of the value of bottled wines exports. Meanwhile Belgium saw sales value sales increase of 36% overall, with packaged wines up 27% and bulk 58%.
Wine tourism (domestic and international) had provided another welcome boost to growth, the report said, boosting the sustainability of the small and medium sized producers in particular, with “exponential” growth in the number of visitors to cellar doors and the turnover at cellar doors, indicating a full recovery from the Covid pandemic.
There were, however, some challenges, in particular the localised problem of infrastructure and equipment challenges at the Port of Cape Town and although in the short term the newly formed wine industry body, South Africa Wine, is working with exporters to engage with port authorities, a long-term strategy needs to be implemented to solve the logistical challenges and delays, it says.
“Order fulfilment is key in the international wine business and we cannot allow delays due to a below-standard logistical performance to tarnish our reputation as a reliable supplier of quality wine,” Christo Conradie, stakeholder engagement, market access and policy manager at South Africa Wine said.
“Transnet (Port of Cape Town) is a crucial enabler to ensure we deliver on our global promise and we have the undertaking that Transnet will step up to the mark, focusing on the controllables via a collaborative effort.”