Sawis harvest report and forecasts

Despite a trend of bigger total wine harvests in South Africa in recent years, as well as increased “transfer stocks” at the country’s wine cellars, considerable volumes of distilling wine and concentrate for sweetening are being imported, and further imports of grape juice are foreseen for next year.

At the same time the country’s production and demand situation is heading for a shortage of red wine in the medium price category by 2008 – 2009, as well as white wine in the period 2005 – 2009, which will necessitate further imports to satisfy the demand.

These facts were revealed in two recent reports by Sawis (SA Wine Industry Information and Systems), namely Overview of the 2004 crop and Sales in 2004 in their monthly Wine Industry Information publication, and a 24-page report entitled Production and Market forecasts for 2005 – 2009.

The latter publication follows on the first such forecast that was published last year – according to Sawis, “to assist the industry with planning vis – vis plantings, future production figures and the volume of marketable wine”.

These forecasts are done annually for a five year period according to a model that has been developed with input from various role players in the industry, as well as the VinPro viticultural consultants. The model takes into account factors such as weather conditions, and decision making trends with regard to plantings and uprootings – over both the short and the long term.

Sawis emphasises that this document should be seen as “work-in-process” and that input from all role players will be appreciated. The most important conclusions from the two reports mentioned above are:

Production and market forecasts – 2005 to 2009

  • From 2005 to 2009 plantings of white cultivars constitute on average between 37,0% and 46,9% of total plantings, while red varieties constitute between 63,0% and 53,1%. Compared to 2003, it is clear that less red and therefore more white is being planted.
  • From 2005 to 2009 uprootings of white varieties constitute on average 3 506 hectares per annum, while red varieties are being uprooted at an average of 920 hectares per annum.
  • Red wine available for marketing will amount to approximately 214,8 million litres in 2005, whereafter it will increase by approximately 8% annually, to 269,5 million litres in 2009. Cinsaut is the only red cultivar that shows a negative average growth.
  • White wine (excluding table grapes) available for marketing will amount to approximately 577,0 million litres in 2005, whereafter it will show an average annual decrease of 3,2% to 506,2 million litres in 2009.
  • The domestic demand for natural wine is expected to increase by 0,9% in 2005; thereafter it will show a slight annual increase until 2009.
  • In 2005 the total export market (drink wine) is estimated to increase by 11,2%; the same growth trends are indicated for 2006, whereafter the growth will even out slightly.
  • The demand for rebate, distilling wine and non-alcoholic is estimated to amount to 377,2 million gross litres in 2005 and should increase to 406,9 million gross litres in 2009.
  • Estimates show that the market’s demand for red wine will be satisfied in 2005, 2006 and 2007, but that in order to satisfy the domestic demand for this kind of wine, red wine for the medium price market will have to be imported in 2008 and 2009.
  • If the demand for both natural wine, rebate, distilling wine and non-alcoholic is taken into account, domestic demand for the period 2005 to 2009 will not be satisfied.
  • The total demand for red wine (domestic and export) is estimated to amount to approximately 190,3 million litres in 2005, whereafter it will increase annually by an average of 11% to 289,3 million litres in 2009. Attention is drawn to the fact that according to previous Production and Marketing Estimates, there would only be sufficient red wine for 2004 and 2005, and that a shortage situation would be experienced from 2006 to 2008.

“On the supply side, the difference between the estimates may be ascribed to the fact that in the model, the yield per vine for red cultivars was adjusted upwards to make provision for the trends that are currently being observed. On the demand side, the trend of the HP Red market declined, compared to the previous estimate. The MP Red market trend has increased, however, compared to the previous estimate. ”

In 2005 the demand for white natural wine (domestic and export) will amount to an estimated 404,7 million litres, whereafter it will increase annually by an average of 3,1% to 458,1 million litres in 2009. The demand for rebate, distilling wine and non-alcoholic is estimated to amount to 354,4 million gross litres in 2005, whereafter it will increase annually by an average of 1,9% to 382,8 million gross litres in 2009. If the demand for both natural wine and the latter products is taken into account, the domestic demand will clearly not be met. In the previous Production and Market forecasts, it looked as though white wine would experience a shortage situation from 2004 to 2008.

2004 crop and sales

The 2004 crop was the biggest in history and was described by several producers as “one long ordeal” because of inclement climatic factors that resulted in delayed ripening. For the first time ever the crop exceeded 1 000 million litres and amounted to 1 008,7 million litres – 5,5% (52,7 million litres) more than last year.

This is what the crop looked like:

  • Approximately 698,8 million litres drink wine were produced, 13,9 million litres fewer than in 2003, to amount to 69,3% of the total wine crop.
  • The production of rebate wine increased by 69,3% to 85,4 million litres.
  • Production of juice and concentrate for non-alcoholic purposes and distilling wine respectively increased by 24,5 and 7,1 million litres in 2004.
  • According to the latest available information, 36 million litres @ 10% alc/vol distilling wine will be imported in 2004, 10 million litres @ 10% alc/vol of which will be used in 2005.

The imports are necessary because the market needs cannot be satisfied locally. For the same reason it looks like an estimated 2,5 million litres concentrate will be imported for sweetening purposes in 2004, and that imports will most probably also be necessary in 2005. In 2004 the estimated portion of the drink wine crop which was produced as red wine amounts to 36,1%, compared to 32,1% in 2003.

The domestic demand for natural drink wine is expected to decrease by 5,9 million litres (1,9%), 3,8 million litres of which fall into the standard price category. On the other hand, sales of natural wine in the high price category will increase by an estimated 3,6% (1,1 million litres). Exports of drink wine will increase by approximately 14,1% (33,8 million litres) in 2004.

The consequence of the above is that the drink wine stock at private and co-operative cellars will amount to an estimated 417,2 million litres on 31 December 2004. This is about 60,4 million litres more than on 31 December 2003. Estimates indicate that red wine will constitute an increasing portion hereof. So, for example, red wine amounted to 30,2% of the total drink wine at co-operative cellars in October 2001, increasing to 41,7% in October 2002, 39,0% in October 2003 and 44,2% in October 2004.

The above-mentioned reports appear in full on the website www.sawis.co.za

– Cassie du Plessis

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