Record production for winegrowers

Last summer's drought was disastrous for many farmers but for winegrowers, the near perfect growing conditions resulted in record production of 345,000 tonnes for the 2013 season.

The season marks an increase of 28.5 per cent on the very short 2012 crop and was 5 per cent higher than the prior record, set in 2011.

Philip Gregan, chief executive of 1000-member strong New Zealand Winegrowers, said the summer was terrible for pastoralists but "fantastic" for winegrowers.

He said the long, hot summer delivered the quality for the vintage and December flowering season delivered the quantity.

But Gregan said consumers wishing for a return to the low prices of the 2008-9 wine glut could be disappointed. He said the supply imbalance since that time had been addressed and that this season would not result in an oversupply.

"All the signs are that the wines are going to be pretty fantastic," he told APNZ. "They (consumers) are really going to see some spectacular wines out of this vintage," he said.

Demand from offshore will determine pricing and Gregan said there had been a rise in wine prices over the last 12 months "and that's not going to disappear".

Gregan said there was renewed optimism in the industry, helped along by more exporter friendly New Zealand dollar against the US dollar.

However, he said a New Zealand dollar at near five year highs against the Aussie dollar was causing some concern because Australia is the country's biggest customer.

In the year to May, wine exports were worth $1.2 billion. Australia was responsible for $368 million, or 30 per cent, of the export total.

Rabobank, in its Wine Quarterly report, said low carryover stock levels have meant that export of 2013 sauvignon blanc has already started with improved momentum.

The bank's senior analyst Marc Soccio said the New Zealand wine industry was on a stronger footing to deal with the rebound in supply now that the local category was well established in key markets around the world.

Rabobank, which specialises in financial services for the food and agribusiness sector, said wine grape production in the southern hemisphere appeared to have been healthy.

"Nearly all major southern supply countries are set to register above-average crops for 2013; with Chile and South Africa also expected to harvest record crops, and Australia to record its largest harvest in five years," he said in the report.

New Zealand wine export volumes declined by 8 per cent in the first four months of the year as exporters waited for larger volumes from the 2013 vintage to come on-stream.

The value of trade fell more gently by 1.1 per cent as significantly less wine was shipped in bulk format over the period, Rabobank said.


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