Wine producers hoping to avoid another surplus crisis

Another bountiful harvest could spell surplus challenges for Mzansi's wine industry. But there's a silver lining: global wine production projections point to 2021 being the third consecutive year of below-average global output and approaching 2017 levels - the lowest in six decades

An extremely low worldwide wine production volume is expected for the remainder of 2021, according to the International Organisation of Vine and Wine (OIV). Photo: Supplied/Unsplash

An extremely low worldwide wine production volume is expected for the remainder of 2021, according to the International Organisation of Vine and Wine (OIV). Photo: Supplied/Unsplash

Mzansi’s wine industry is heading for another bountiful harvest but producers will have their work cut out for them if they want to avoid another wine surplus crisis like last year. Low global wine production levels could be a silver lining for the industry.

Dr Etienne Terblanche, a viticulturist at Vinpro, says they expect a great wine harvest in 2022 thanks to favourable weather conditions this year. Cool conditions in the country’s generally warm to very warm climate is positive for grape quality and ample rainfall allowed reservoirs to be filled for optimal irrigation.

“Above-average winter rainfall, coupled with low temperatures during dormancy, has laid a strong foundation for the growing season. If cool and moderate weather persists, we can expect yet another positive harvest both in terms of quality and quantity,” explains Terblanche.

Although it can still change, the cooler weather will likely delay the harvest with 10 to 14 days.

Avoiding another wine surplus

Possible surpluses are an element of concern. Last year, wine producers were stuck with surplus stock of about 280 to 300 million litres of wine due to alcohol sales bans and an exceptional harvest. Wine brands were forced to turn 80 million litres of wine grapes into juice.

Terblanche says that, to avoid a repeat, the industry will have to continue to allocate some grapes for juice concentrate and to find new markets. “The extremely low global wine production levels could also open new export opportunities for [South Africa], which could prevent us from experiencing a similar challenge next season.”

Vinpro viticulturist Dr Etienne Terblache. Photo: Supplied/Vinpro

Recently announced figures from the International Organisation of Vine and Wine (OIV) – preliminary at this early stage but unlikely to change much – reveal global wine production volumes are projected to be “historically” low. This is mainly due to unfavourable weather in Europe’s wine-growing regions.

The Paris-based organisation says global wine production volumes in 2021 is projected to come in at 250 million hectolitres (mhl), a drop of 4% from 2020, and 7% below the 20-year average.

The projections point to 2021 being the third consecutive year of below-average global output and approaching the 2017 level of 248 mhl. 2017 saw the lowest global wine volume in six decades.

The potential from exports can, however, only be realised if South Africa’s logistical challenges are addressed.

Terblanche notes, “Logistical challenges at the Cape Town port terminal are urgently being addressed to support these exports, while negotiations to secure preferential trade agreements with China and African countries continue.”

Wine grapes being harvested in the Western Cape. Producers are hoping to avoid a surplus crisis this year. Photo: Supplied/Food For Mzansi

Wine tourism another option

Furthermore, Terblanche notes that wine tourism could also be a solution to a potential surplus stock crisis next year. “But its success will depend on whether we will be able to trade wine freely with no alcohol trade restrictions,” he cautions.

Terblanche says the wine industry continually engages with more than ten national government departments to ensure fact-based decisions regarding trade restrictions, together with various targeted initiatives to promote responsible consumption and legal trade.

“Despite setbacks brought on by Covid-19 over the past two years, South Africa’s wine and brandy industry is ready to not only bounce back to where we were before the Covid-19 pandemic hit, but to bounce forward.”

Dr Etienne Terblanche, viticulturist at Vinpro

“This sector, which provides job opportunities to close to 269 000 people and contributes R55 billion to the economy, is on a path to rebuild.”

To achieve the wine industry’s vision of being robust, adaptable and competitive, the industry is focusing on boosting exports and local sales, promoting inclusive growth and responsible consumption, and on striving for sustainability in all facets of business, Terblanche adds.

ALSO READ: 2021 wine grape harvest deemed to be excellent

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