News
Region Specific Report - September 2012
February 7, 2013 - 16:02
The state of the Argentine economy remains the same, as the wine industry continues to feel the effects of the local economy. Negative actions taken by the government have caused a significant drop in case goods exports to Brazil. Additionally, exporters are in a difficult spot regarding sales outside of Argentina, and are considering partnerships to sell
bulk wine to be bottled across Argentine borders.
Export sales are decreasing, especially in the below $30 category. Local consumption has decreased due to continued inflation and to increased pricing of wine on the shelves. Consequently, the domestic bulk wine market has slowed as a result of sluggish retail sales.
Meanwhile, bulk wine and concentrate exports remain strong, as buyers continue to ship against existing contracts, mainly due to purchases made by the United States. Between January and July 2012, the United States purchased 66% of the total bulk wine in Argentina and 42% of the concentrate. However, if new contracts are not negotiated soon, these numbers will drop dramatically. There are concerns about Chile ’s continued competitive pricing and its affect on the Argentine wine market. Carry-over inventories are on the normal to normal-plus side. Dry red wine is available, as producers made more dry red wine in 2011 than dry white wine, which was instead used for concentrate.
Posted in: Argentina
Region Specific Report - August 2012
February 7, 2013 - 15:45
Argentina continues to experience a dry and warm winter. In contrast to last month, loadings are crossing borders more easily, due to less snowfall in the mountains. The economy seems to be entering a recession, impacting wine sales, and consequently, the bulk wine market.
Most prices remain consistent with last month, however, there are some on-going negotiations for generic red wine, with opportunities for lower offers. Bulk wine and concentrate export figures continue to grow, as wineries and concentrate producers are now loading materials contracted earlier in the year.
Posted in: Argentina
Region Specific Report - July 2012
July 10, 2012 - 09:48
The beginning months of winter have started off considerably warmer than previous years. Despite the warm start, the mountains have been experiencing heavy snowfall, which will alleviate drought concerns for the next harvest. Transportation routes through the mountains have experienced significant delays and blockages due to the weather conditions, which has caused a serious slowdown in the transportation of goods and services throughout the region.
As in previous reports, sales trends remain consistent. Local sales continue to lag, while Argentina’s inflation rate and protectionist government policies continue to deter case good exports. Meanwhile, these policies have had little effect on bulk and concentrate sales, which continue to experience growth.
Posted in: Argentina
Global Market Update − July 2012
July 10, 2012 - 09:47
July marks the middle of summer in the Northern Hemisphere, and expectations are for healthy crops across all of the major producing regions. After a disappointing 2011 crop, especially in California and Italy, a larger crop would be welcome relief to many buyers in the bulk market. Prices moved higher at a rapid pace in California over the past twelve months. It appears that a plateau has been reached, and some pricing softness exists for certain varieties in the commercial growing areas. Italy looks to rebound from last year’s small crop, which should help take some of the pressure off of the recently overheated market in Spain. French producers in the Languedoc saw a larger than usual crop in 2011, and are still looking to move some white inventory. The economy in Europe continues to be a cause for alarm in the bulk market, as buyers continue to send messages of concern about pricing and corresponding consumption levels.
Wineries in the Southern Hemisphere continue to push along, with strong sales reported in Chile and Australia. Argentine suppliers continue to move forward with good sales on Malbec, Muscat and generic varietals. New Zealand pricing has continued to head in an upward direction, as the 2012 crop proved to be too small to cover the market demand. South Africa continues to be a favorite destination for buyers in Europe, as the Rand and the larger than normal white grape harvest, have allowed for strong buying opportunity. Overall, the market seems to have cooled slightly, after the extreme highs experienced over the past twelve months. It remains to be seen whether this is a trend, or simply a seasonal lull, as many players in Northern Hemisphere are now deep into their summer
holidays.
Posted in: USA, Canada, Chile, France, Germany, Argentina, Australia, South Africa
Region Specific Report - June 2012
July 10, 2012 - 09:25
The 2012 harvest is 20.5% shorter than 2011, with a final crush volume of 2.22 million tons. The most affected varietals of the shorter harvest were Criollas, Pedro Gimenez and Bonarda. 480 million liters (145,000 metric tons) of sulfited must was produced for the domestic and international concentrate market. 125,000 tons will be exported; the balance will be consumed domestically.
Inflation has caused a decrease in consumption and a consequent slowdown in bulk sales, but has not affected prices, as they remain the same. Economic conditions remain volatile. Despite a very short crop, economic concerns resulting from inflation have kept demand down and maintained lower prices.
Posted in: Argentina
Global Market Update − June 2012
July 10, 2012 - 09:22
During the past two years of producing this update, we have seen the global economic world
continue to remain in a state of flux. Nimble producers that have kept a flexible sourcing model in
this evolving world continue to prosper.
Currently, European economic concerns dominate the headlines; opportunities have now
presented themselves in the bulk wine markets. As investors move away from the euro, and
towards the relative safety of the dollar, the resulting gain in dollar strength has made several
import markets more appealing. Wine from South Africa has attracted the most attention as the
SA rand dropped significantly in value against the rebounding dollar. Chardonnay and dry white
wine seem to be attracting the most interest from buyers today. The Australian dollar and Chilean
peso have also seen relative weakening against the dollar, and wines from those countries are
beginning to tempt buyers as well.
The Southern Hemisphere harvests are all winding down, and it appears that we have mixed
results. South Africa and Chile look to be above average, Australia is reporting an average
harvest, and Argentina and New Zealand have come up short. Producers are starting to make
estimates in the Northern Hemisphere, and it is believed that California is looking at a larger than
average 2012 crop. Recent storms in France have impacted several areas with varying degrees
of crop damage and the extent of the damage is yet to be determined but could affect future crops.
Germany and Spain have been experiencing mild temperatures and minimal rainfall. This has
allowed for good bud break and fruit set, which should result in an average crop for both countries.
While uncertainty remains regarding supply availability, activity remains strong, and prices are
holding in most markets.
A big plus for all of us in the global wine industry is that demand for wines around the world
remains relatively strong. Consumer thirst for wines from well-known producers in both new
brands, in addition to tried and true labels, continues to grow. Paying close attention to all
economic, supply and demand factors, as well as remaining agile, seems to be the current key
to success.
Posted in: USA, Canada, Chile, France, Germany, Argentina, Australia, South Africa
2012 Crop Size Down by 22%
May 7, 2012 - 09:53
The harvest has almost finished and the government forecast of a crop down 22% will be accurate. For many, this is welcome news as earlier crop reports estimated the crop down
by as much as 30%. Despite the volume, the quality is excellent; reds are showing the strongest qualities (ripe tannins, great colors & flavors), while whites suffered the largest loses, specifically on generics.
Posted in: Argentina
London International Wine and Trade Fair
May 2, 2012 - 10:15
The Ciatti Company will once again be attending the London International Wine and Trade Fair.
Please come and see the Global Ciatti Team at Stand Q6.
Posted in: USA, Canada, Chile, France, Germany, Argentina, Australia, South Africa
Argentina Predicting A Shorter Than Average Crop Size
April 10, 2012 - 09:58
There is tremendous speculation about the size of the 2012 crop; the current pace of harvest would indicate a crop size at least 22% shorter than average. The market for low priced grapes is going up due to high demand and the government’s suggested price increase for Criolla grapes (ARG$1.10 to $1.20). The intent of the move was to push growers towards concentrate production and has caused increased pressure on the generic white wine market.
Posted in: Argentina
2012 Crop Size Significantly Down from 2011
March 7, 2012 - 10:20
As harvest approaches, the crop looks like it will be down from last year. Expectations are now for a reduction of at least 10%, and likely more. Weather issues have taken their toll on the vines in both Mendoza and San Juan, and most now feel that a reduction is eminent. The last few days have been humid but disease issues are not reported in large numbers. Despite the anticipated small crop, bulk wine prices are not increasing as the carry over stock is trending toward a long position. As of January 1, 2012 the official bulk stock number was 1.3 billion liters. At current demand levels, a six month use rate would be near 700 million liters, and the needed technical stock should be at 200 million liters. Therefore, it appears that stocks are in a slight over supply at 400 million liters, or roughly three and a half months of demand. We see strong availability in both Red and White Generic wine, and a slightly tighter varietal market.
Posted in: Argentina