Wine: Global production is at a record low

Global wine production reached 244.1 million hectoliters, down 7 percent from last year, the intergovernmental organization OIV said.

“Once again, extreme weather conditions – such as early frost, heavy rainfall and drought – have affected significantly the world’s vineyard production“, warn the officials of the organization that provides data to countries that produce and consume grapes and wine.

“A perfect storm in the northern and southern hemispheres has created this disastrous situation,” OIV chief statistician Giorgio Delgrosso told the BBC. The analysis is based on information from countries representing 94% of world production of the ancient drink.

The production of wine decreased in almost all countries of the European Union, which produces over 60% of the world’s total. According to the OIV, the lower yields are due to rains and storms in some countries and droughts in others.

Yields fell 14% in Spain and by 12% in Italy, where dry weather reduced this year’s grape harvest. However, it favored France, which is now the world’s largest producer, overtaking Italy, which lost the title. Spain maintained its position as the world’s third largest wine producer, although its production fell by 14%.

The picture was also grim elsewhere in the world, with countries in the southern hemisphere particularly affected, recording significant declines in production, from Australia and Argentina, to South Africa, Brazil and Chile.

Producers faced a shock in Chile, the largest wine producer in the southern hemisphere, where yields fell by 20% as a result of drought and wildfires. The harvest was also poor in Australia, where production was down by a quarter from last year. However, the situation was rosier in the US, where production increased by 12% in 2022.

Estimates for Greece

For 2023, the OIV predicts for Greece vertical reduction of production by 45%, to just 1.1 hectoliters from 2.1 million in 2022. The decrease is mainly attributed to the heavy rains that occurred in our country during last spring which caused diseases such as powdery mildew, as well as high temperatures combined with drought in the summer months, strongly affecting the vines.

Important factor and the lack of labor in the harvest, but also the high cost of production.

The good script

But there may also be some good news for wine lovers. The positive scenario, if any, for the industry is that it can help to alleviating market imbalances. In a context where global consumption is falling and inventories are high in many parts of the world, the expected low production could bring balance to the global market,” the OIV stressed.

While reduced global production is bad for the industry as a whole, the OIV notes that falling global demand could mean the overall market remains relatively balanced – avoiding a fall in prices. “As economic growth in China has slowed since 2018, we saw the consumption and imports of wine decrease significantly”Delgrosso said.

“Low production is not good news, but lower consumption levels may help stabilize prices.” In August, the French government announced that it would allocate approx 200 million euros to destroy surplus wine stocksy, as the industry struggled to adjust to the fall in demand.

The role of the climate crisis

While the OIV talks about extreme weather events affecting production, experts have yet to link the trend definitively to climate change, explains Inaki García de Cortázar-Atauri at France’s national agricultural research institute INRAE. An expert on the effects of climate change on agriculture, he said the damage in Italy was due to the cultivated land cannot absorb water like natural soil.

But “one can see that extreme weather events are becoming more frequent,” he said, with heat waves or rainfall hitting some areas and to add to existing problems such as powdery mildew.