(This posting is a brief summary of the presentation given for SwissCham Singapore on 6th June 2018)
Severe spring frosts and summer heatwaves, as had not been seen since the late 50s and early 60s, gravely affected especially the European harvest in 2017. This resulted in a historically low worldwide production of only 250m hl. The overall 9% global decline against 2016 effectively masks significant differences between countries: while yields in the US and Australia has actually been strong, the main producing European countries saw steep declines: Germany -15%, Italy -17%, France -19%, and Spain -20%.
This small harvest, in several countries the smallest in half a century, has significantly contributed to changing demand and supply dynamics. We have been used for a long time to excessive supply of wine, especially at the lower end – the infamous European ‘wine lake’ – and the resulting pressure on prices. In a drive towards quality and to make viticulture sustainable over the long term, the EU has successfully implemented vineyard surface reduction policies over the last decades. These policies have been slowing down in recent years, but their impact on production volumes has now been compounded by the unpredictability of today’s climate.
As we will see in a future post, the wider swings in climatic extremes from year to year will have important consequences for wine-making in the longer term. In the immediate future, limited availability of wines from 2017, which in fact looks very promising in terms of quality, means we can expect prices to be firm for the coming months.
A young vine, Southern France