The Southern Hemisphere harvests are in full swing and crop-size expectations vary from country to country: Argentina (frost damage, hailstorms), Chile (drought) and Australia (La Niña) are expecting smaller crops versus 2021, South Africa a crop in line with or just down from last year’s, with New Zealand’s bouncing back after 2021’s short output. La Niña has made for a cooler and in some cases more humid growing season than normal, setting picking back behind a normal schedule in many areas. 

Southern Hemisphere bulk prices are – broadly speaking – trending upward due to a number of factors, each of which apply in some or all of the supplier countries: low or negligible carryover of white wines going into the new vintage; expectations of a shorter 2022 crop; inflationary pressure. Some price rises are modest, such as the 5-8% increase between vintages on South Africa’s good-quality varietal whites (despite strong demand), while others are more noticeable: Argentina’s prices have in March risen by an average of USD0.20/ litre across the board following serious February hailstorms in Mendoza’s East Valley, as well as a domestic 12-month inflation rate of 50%. At the same time, bulk wine buyers around the world are experiencing their own input cost rises and squeezed margins, and justifiably expect inflationary pressure to rein-in consumer spending as the year progresses. 

The consequence is a disparity in pricing expectations between buyer and seller that will likely lead to more shorter-term transactions. As this month’s Italy page states: “This inflationary environment will oblige final buyers like supermarkets or big importers to change their future behaviour, probably fixing prices valid for less than six months.” A second year of spiralling sea freight prices and shipping delays – improvements are intermittent – is likely to test buyer patience; suppliers know this patience is finite and buyers may eventually seek alternative sources if they are able. 

Looking further ahead, unseasonably dry winters in California, La Mancha, the Languedoc and northern Italy have raised question marks over their 2022 crops. It’s very early days but 2022’s global wine output seems unlikely to be bumper, but the economic headwinds businesses and consumers are going to face through the year are likely to be a drag on consumer demand anyway. Particularly since the outbreak of the Ukraine-Russia conflict in February, and its impact on energy prices, the dreaded ‘R’ word has been circulating. 

But, as ever, even in difficult times opportunities persist: South Africa holds good supplies of premium Chenin Blanc which, at ZAR9.00-9.50 FOB, constitutes an excellent price-quality alternative to the other white varietals; Spain and Italy still possess some good-quality 2021 varietal whites, albeit diminishingly so; Argentinian Malbec has – as mentioned above – risen in price but any peso devaluation following approval of Argentina’s agreement with the IMF could slash the price in dollar terms; Australia’s red wine prices continue to soften following China’s imposition of import tariffs. Ciatti can draw on its decades of experience to help you find and harness such opportunities – don’t hesitate to get in touch. In the meantime, read on for detailed updates from each market, and stay safe.

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Grape Market Bulk Wine