AUS: Government sees grape output plateau - report

By | 26 July 2006

Australian wine grape production next year will be around 1.9m metric tons, almost level with output over the past two years, government figures said today (26 July).

The forecast, from the Australian Bureau of Agricultural and Resource Economics (Abare), suggests production may have hit a plateau after surging since the early 1990s.

Local reports said that Abare had forecast a rise in production of white wine grapes particularly Chardonnay, while the output of red wine grapes was set to fall, with the steepest falls for Cabernet Sauvignon and Merlot.

A Dow Jones report cited an Abare forecast that non-premium red and white wine grapes will also decline next year. Abare did not provide actual estimates.

Australia's wine producers have faced downward pressure on prices due to a wine glut in the country. The Australian Broadcasting Corporation said earlier this week that bottles of clean skin Chardonnay and Merlot were being sold for A$2.00 a bottle in major multiples. These wines usually command a price tag of A$6.00.

Abare forecasts that the unit value of Australian wine exports would fall across all of the country's major markets.

"With a growing focus on export wine sales, prices for Australian wine grapes are projected to decline in response to increasing competition from other wine producing countries as growth in supply outstrips growth in demand," the report quoted Abare as saying.

Sectors: Wine

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