Current situation of the vitiviniculture sector at a global level

CASE Ih – New Holland

Speaking from the OIV´s Headquarters in París, by Web Conference, Director General PAU Roca presented on 23 April information on wine production, consumption and international trade in 2019. The impact of Covi-19 in the sector was also highlighted.

IN 2019 :

  • The surface area of the world vineyard is estimated at 7.4 mha, stable since 2016
  • World wine production1is estimated at 260 mhl, a marked decrease, compared to the historically high 2018 production
  • World wine consumption is estimated at 244 mhl, marking a +0.1%

with respect to the previous year

  • The world wine export market has  expanded both in volume, estimated at 105.8 mhl (+1.7%), and in value with 31.8 bn EUR (+0.9%)
  • First estimates of wine production in the Southern Hemisphere indicate low expected volumes for 2020  (exception for South Africa  and  Uruguay)


Continental Int Noticia

1  Excluding juices  and  musts

Vineyard area stabilisation

In  2019  the  world area under vines,   corresponding to  the total surface area planted with vines  for  all purposes (wine,  table grapes and raisins), including young vines not yet in production, is estimated at 7.4 mha.

Starting with the Northern Hemisphere, overall stability can  be observed in the European Union (EU) vineyards, which stand for the fifth consecutive year  at 3.2 mha.

Within the EU, the latest available data for 2019 indicates an increase in the area under vines  in France (794 kha), Italy  (708 kha), Portugal (195 kha),  and  Bulgaria (67 kha).  The  vineyard surface area in Spain (966 kha), Hungary (69 kha) and  Austria (48 kha), on the other hand, slightly decreased with respect to 2018.

In East  Asia, after over  10 years of significant expansion, the growth of Chinese vineyard (855 kha),  second in the world by surface area just behind Spain,  seems to be slowing.

In the United States, the vineyard has  been consistently decreasing since 2014, and  its estimated surface area in 2019 is 408 kha.

In South America, developments in vineyard surface area between 2018 and  2019 showed a downward trend for the fourth year  in a row.

The  only  exception in  the continent is  represented by  Peru that increased by 7.1 kha (+17% / 2018) its vineyard surface area reaching 48 kha.

South Africa’s vineyard surface area remained stable with respect to 2018, at 128 kha.

Australia the area under vines  remained stable at 146 kha in 2019, in New  Zealand the surface area grew by 1.6 % reaching a record-high of 39 kha.

Production back to the average

World wine  production, excluding juices  and  musts, in 2019 is estimated at 260  (259,0)  mhl,  marking a sharp decrease of 35  mhl (-11.5%) with respect  to  the  exceptionally high   volume recorded in  2018.  Overall, after two consecutive years that can  be  defined as  extremely  volatile, 2019  brings global  wine  production back  to average levels.

Italy   (47.5  mhl),   France  (42.1  mhl),   and   Spain   (33.5  mhl),   which together account for  48% of world wine  production in 2019, saw  a sharp decrease in their wine  production with respect to 2018.

Still  within the  EU,  other  countries that  registered a  decrease in  production with respect to  2018  are  Germany (9.0  mhl,  -12%), Romania (5.0  mhl,  -4%),  Austria (2.5 mhl,  -10%),  Hungary (2.4 mhl,

-34%) and  Greece (1.9 mhl,  -8%).  The  only  EU country that, in 2019, saw  an  increase in  its wine   production is  Portugal with 6.7  mhl (+10% / 2018).

In  Eastern Europe, weather conditions were favourable in  Russia (4.6  mhl,  +7% / 2018) and  Ukraine (2.1 mhl,  +6% / 2018), while  in Moldova the  harvest was  less   abundant in  2019  and   the vinified production was equal to 1.5 mhl (-23%  / 2018).

In  Asia,  the new   data  available for  China indicate  an  estimated vinified production  of 8.3 mhl  in 2019, marking a decrease of -10% with respect to the already relatively low production level of 2018.

In  North  America, wine   production  in  the USA  is  estimated at 24.3 mhl, a decrease of 2% compared to 2018. It seems that this  slight decline in 2019 does not  depend on  bad  weather conditions or  the raging fires   that occurred in  California in  October (harvest took place just  before), but  it is a response to overcome an oversupply of grapes and  wine.

In South America, the overall trend for  wine  production in 2019 is negative with respect to 2018. However, while  in Argentina (13.0 mhl) and   in  Chile  (12.0 mhl)  2019  vinified productions  are   lower with respect to 2018 but  overall in line or even higher than their five-year averages,  Brazil (2.0  mhl)  registered a  sharp decrease in  its wine production in 2019 of more than 1 mhl (-34%  / 2018).

In South Africa, 2019 production reached 9.7 mhl. This represents an increase of +3% with respect to  the low volume registered in 2018, but  it is still far from  the average production levels  recorded before the beginning of the drought that heavily  impacted the country for three years in a row (2016, 2017 and  2018).

With regard  to   Oceania,  Australian wine   production  registers  a decline for  the second consecutive year  reaching 12.0 mhl  in  2019 (-6% / 2018). In New Zealand wine  production was 3.0 mhl in 2019, a slight decrease of -1% with respect to 2018.

Expansion of the international trade of wine

In 2019 the world wine  export market – considered here as the sum of the exports of all countries – has  expanded with respect to  2018 both in  volume, estimated at 105.8 mhl  (+1.7%), and  in  value,  with 31.8 bn EUR2  (+0.9%).

Strong increases can  be  observed in exports from  Italy  (+2.0 mhl), Spain  (+1.3 mhl),  Canada (+0.4 mhl)  and  Chile  (+0.3  mhl).  However, significant reductions in exports are  recorded for Australia (-1.1 mhl), South Africa (-1.0 mhl), Ukraine (-0.4  mhl) and  Hungary (-0.3  mhl).

In 2019 the global  value  of wine  exports is on  the sustained growth path started in 2010 reaching a new  record high.  France was still the most important world exporter in terms of value,  with 9.8 bn  EUR exported in 2019. There were rises in the value  of exports in many large exporting countries like France (+425 m EUR), Italy (+211 m EUR), and  New Zealand (+84 m EUR). The largest declines concerned Spain (-234  m EUR) and  South Africa (-73 m EUR).

In 2019 the international trade of wine in terms of volume was mainly dominated by  three European countries – Italy,  Spain,  and  France

– that together exported 57.1 mhl,  accounting for  54% of the world market.

2  Based  on the tracking of 92 countries via the Global  Trade Atlas customs data.

In 2019 the top  three importers in terms of volumes were Germany, the UK, and  the USA, which together imported 40.4  mhl,  reaching 38% of world total. These three countries represent 39% of the total value  of world wine  imports, reaching 11.9 bn EUR.

The  first  importer in 2019 is still Germany with 14.6 mhl,  even if its wine  import volume decreases by 0.6% compared to 2018.

China for the second consecutive year  saw a significant decline in its imported volumes (-11% / 2018), reaching 6.1 mhl in 2019. In terms of value, the trend is similar, with an overall downfall of -9.7% compared to 2018, reaching 2.1 bn EUR. The  only  category that increased both its volume (+8%) and  its value  (+8%) is sparkling wine,  although it represents only 2% of the total imported volume.

Early estimates of the 2020  harvest in the Southern Hemisphere

First   estimates of  wine   production in  the Southern Hemisphere indicate low expected volumes for 2020  for the majority of countries, with the exception of South Africa and  Uruguay.

In 2020  a decline in production volumes in all South American countries, with exception of Uruguay, are  expected. In Argentina estimated production is 11.6 mhl  (-11%), in Chile  10.5 mhl  (-12%) and in Brazil 2.0 mhl (-1%), while  in Uruguay 0.65 mhl (+11%).

South Africa seems to  continue its recovery path from  the drought and  expects +5% with respect to last year,  reaching 10.2 mhl.

In  Oceania, Australia expects a lower production level  in  2020 estimated at 11.5 mhl  (-4%)  due  to  drought and  bushfires while  in New Zealand (2.9 mhl, -2%) expectations on wine  production are  by and  large in line with 2019, or just below.

Of course, this  are  preliminary estimates that have  to be interpreted with  caution,  especially given   the  exceptional circumstances  in which we are  right now.

Impact of Covid-19 in the wine sector

At  this   early   stage the  information and   statistical data available are  insufficient to  provide an  accurate forecast and  anticipate the scenario of the vitivinicultural sector in the future. However, thanks to permanent contact with the Organisation Member States, the OIV has  certain qualitative information at its disposal.

The  feedback given  by the Member States reflects a radical change or  transfer between distribution channels. The  expected overall balance is a decrease in consumption, a reduction in average prices, and   therefore an  overall decrease  in  total sales value,   turnover, margins and  finally profits of the wineries.

As far  as  exports are  concerned, economies in recession are  not  a promising market to develop, and  during this  pandemic, the largest consuming countries have  been the most affected. Trade flows  may recover along  with the economy, but some permanent changes could occur.

Alcohol   consumption  is   also   being  debated.  Messages  on   the positive effects of wine  consumption are  totally unacceptable and irresponsible.

The   same applies to  the  issuing, under these  circumstances, of general statements or  biased messages that are  the result of ideological concerns about wine  consumption, such as abstention.

The  OIV’s work  follows the Strategic Plan  approved by the General Assembly in October 2019 and  covers a 5-year period until  2024.  In the current context, the objectives and  goals  of the OIV go hand in hand with the needs that this  crisis has  highlighted.