{"id":335776,"date":"2023-08-15T16:46:33","date_gmt":"2023-08-15T06:46:33","guid":{"rendered":"https:\/\/southburnett.com.au\/news2\/?p=335776"},"modified":"2023-08-15T16:46:33","modified_gmt":"2023-08-15T06:46:33","slug":"rabobank-warns-of-wine-surplus","status":"publish","type":"post","link":"https:\/\/southburnett.com.au\/news2\/2023\/08\/15\/rabobank-warns-of-wine-surplus\/","title":{"rendered":"Rabobank Warns Of Wine Surplus"},"content":{"rendered":"
\"\"<\/a>
Vineyards will face pressures due to an oversupply of wine, warns Rabobank<\/figcaption><\/figure>\n

August 15, 2023<\/strong><\/p>\n

Even an early removal of Chinese anti-dumping tariffs will not be enough to stop Australia\u2019s wine industry facing years of oversupply, Rabobank has warned in its latest Wine Quarterly report.<\/p>\n

Improving trade relations between the two countries and the recent removal of Chinese tariffs on Australian barley has led to optimism that the five-year tariffs placed on Australian wine in March 2021 may be removed early.<\/p>\n

However, the Rabobank report says, even in a \u201cbest case scenario\u201d, with tariffs removed this year and Chinese consumption of Australian wine recovering quickly, Australia\u2019s wine industry would still face at least two years to work through its current wine surplus.<\/p>\n

Report author Pia Piggott said the current oversupply was the equivalent of 859 Olympic swimming pools worth of wine in storage.<\/p>\n

\u201cThat\u2019s over two billion litres of wine, or over 2.8 million bottles of the wine,\u201d she said.<\/strong><\/p>\n

She said the oversupply was depressing prices, particularly for commercial red varieties.<\/p>\n

\u201cIn the four years following the China-Australia Free Trade Agreement in 2015, the tariff on Australian wine reduced from 14 per cent to zero per cent, helping to double Australia\u2019s market share in China from 12 per cent to 24 per cent,\u201d Ms Piggott said.<\/p>\n

China became a strong value market for Australian red wine varietals, making up 18 per cent of Australia\u2019s export volume and 40 per cent of export value at its peak.<\/p>\n

\u201cWhen a slew of Chinese anti-dumping tariffs and soft bans hit various products exported by Australia in 2020-21, wine took the most notable hit, losing about one-third of export value from its peak in 2019,\u201d she said.<\/p>\n

\u201cUnluckily, the tariff coincided with an exceptional growing season and Australia\u2019s largest crush on record.<\/strong><\/p>\n

\u201cWine production for the \u201921 vintage increased 36 per cent year on year, which would have in any case caused an oversupply.”<\/p>\n

Ms Piggott said exports to the United Kingdom had also fallen from their peak in 2020.<\/p>\n

\u201cIn the United States bulk wine has grown to represent 25 per cent of imports from Australia, with increasing volumes and declining average value,\u201d she said.<\/p>\n

\u201cIn 2023 and onwards we expect the UK and US will remain key export markets for Australian wine, however some headwinds remain.<\/p>\n

“In the UK, implementation of new alcohol duty rates will increase duties payable on a typical bottle of Australian wine by 20 per cent.”<\/p>\n

The Rabobank report said the Australian wine market would remain in oversupply for a considerable length of time.<\/strong><\/p>\n

\u201cTo return to balance and profitability, acreage needs to be reduced, thus over the next five years we will see rationalisation of assets throughout the supply chain,\u201d it said.<\/p>\n

Ms Piggott said for vineyards, margin pressure from both ends would remain high for some time, particularly for uncontracted vineyards with a high mix of red varieties.<\/p>\n

She said the current market would provide “ample buying opportunities as distressed vineyard\/winery assets come up for sale”.<\/p>\n","protected":false},"excerpt":{"rendered":"

Even an early removal of Chinese anti-dumping tariffs will not be enough to stop Australia\u2019s wine industry facing years of oversupply, Rabobank has warned in its latest Wine Quarterly report.<\/p>\n","protected":false},"author":20,"featured_media":200190,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5,3,36],"tags":[1134,46],"yoast_head":"\nRabobank Warns Of Wine Surplus - southburnett.com.au<\/title>\n<meta name=\"description\" content=\"Even an early removal of Chinese anti-dumping tariffs will not be enough to stop Australia\u2019s wine industry facing years of oversupply, Rabobank has warned in its latest Wine Quarterly report.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/southburnett.com.au\/news2\/2023\/08\/15\/rabobank-warns-of-wine-surplus\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Rabobank Warns Of Wine Surplus - 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