|  The study predicts that in the short term inventories are likely to be reduced as current consumption continues to be supported by supplies from the previous vintages. It warns that the current production shortfall may result in a significant increase in export demand, and higher prices for exports globally. The study explains the shortage due to plummeting production in Europe due to the ongoing vine pull as advocated by the EU and the poor weather last year and partly this year. Total production across in Europe fell by about 10% last year and by 25% since its peak in 2004, according to the report by Quartz. Last year, production also dropped to its lowest levels in more than four decades. Europe contributes about 60% of world production.
Global production has been steadily declining since its peak in 2004, when supply outweighed demand by about 600m cases. The report says global wine consumption has been rising since 1996 (except a drop in 2008-09), and presently stands at about 3bn cases per year. At the same time, there are currently more than one million wine producers worldwide, making some 2.8bn cases each year.
"Global area under vine has continued its steady decline, driven by vine pull in the Old World and minimal new plantings in the New World," the report said. "China is the only country consistently expanding its vineyard footprint with an average growth rate of 5.3% over the past three years, although data from OIV is total table grapes, grapes for winemaking are estimated to be a much smaller percentage of the total."
 Although not long ago, the US was reported to have gone past the French in terms of absolute consumption, the study claims that with both of them consuming about 12% each, France is in the lead as a consumer nation. China along with the USA is the biggest driver of consumption with the country gobbling up 9% of the world consumption, same as Italy and much ahead of traditional wine drinkers line Spain and Argentina at 4% each, according to BBC.
To put things in proper perspective, India consumes an estimated 800 million of cases of alcohol, including country liquor and beer. But it’s a baby in front of the rest of the wine world, producing about 1.8 million cases only, including the cheap fortified wines costing less than Rs.150 a bottle. However, there are several producers who find it difficult to get rid of their stocks due to poor quality or poor quality/price ratio. The Report may come as a booster to renew their export efforts, aided by the recent devaluation of rupee resulting in higher costs for the imported wines but making it more export friendly to the producers. |