A Look Inside March 2019’s Global Market Report

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Ciatti 2019 March global wine report

After feverish buying activity in 2017 and 2018, the overall trend in the bulk wine market is a return to the former—and slower—pace. Meanwhile, grape harvests in the Southern Hemisphere started numerous weeks ago and are well underway.

In certain countries—including New Zealand, Chile, the Western Cape, and even parts of Australia—the harvest is lighter than originally forecast, mostly because of natural causes, according to March’s Global Market Report from Ciatti Global Wine and Grape Brokers.

Within the U.S.

In California, the 2018 harvest yield is estimated at a record 4.4 million tons and prices on grapes and bulk wines are at their lowest in five years. Now is an opportune time for international buyers to enter the market and establish small-scale programs for quality coastal and California appellation bulk wines. According to the Ciatti report, California suppliers are expressing interest in export business.

South American Markets

The Argentina market is relatively quiet. The 2019 harvest is expected to yield about 2.35 to 2.5 million metric tons, which is slightly below the forecast of 2.5 to 2.6 MMT. Currently, the country has large volumes of bulk wine and grape juice concentrate available, and prices are open to negotiation.

In adjacent Chile, only time will tell how much shorter the 2019 crop will come in compared to what was expected. Bunches on white varietals, such as Chardonnay and Sauvignon Blanc, and the early red Tintorera are lighter in weight, which is lowering expectations for Cabernet and Merlot, as well. The shorter crop, along with a recent uptick in domestic and foreign demands, is translating into prices moving upward.

European Trends

In southern France, growers experienced an unseasonably warm and dry February but the market is proceeding consistently. According to Ciatti’s report, the best qualities have been sold already or are reducing steadily, but buyers still have access to a range of choices and some price flexibility. The best opportunities, both in terms of pricing and volumes, are on AOP Bordeaux reds.

Spain and Italy have experienced similar weather conditions to France, but there are no concerns about deleterious impacts to crops. Spain’s 2018 crop was almost 25 percent larger than that of 2017 and all bulk wines are available in plentiful volumes at negotiable prices, making Spain “the land of opportunity as far as European bulk wines are concerned,” according to the report.

Italy’s high quality wines and organic wines are in high demand, with some products already out of stock. The demand for generic white wines, however, is lagging because of new and renewed vineyards in Veneto and Friuli increasing their production of generic whites in the past five years, thus decreasing demand for Southern Italy’s white blended products.

Additional Takeaways

The Western Cape endured a drought from 2015 to mid-2018, which has resulted in light yields, particularly from the Olifants River region. However, the growing areas are now experiencing more conducive weather, which is a positive sign for the quality of the 2019 vintage. The current high pricing of South African wine may impact the shelf pricing and subsequent sales, but that won’t be determinable until later in the year.

New Zealand has been negatively affected by water availability. The 2019 harvest appears to be a few weeks early and slightly down. Australia also is experiencing concerns about crop levels, because of heat spells. Even so, there is notable activity in both markets.

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