European Pain, South African Gain?

It is tough to gloat off other producers’ misfortune. Being involved in the wine industry means the pain of poor harvests is understood and empathized with, to the utmost degree. Our season is still in its infancy in South Africa, while the northern hemisphere has run its course and harvest has concluded. However, this season is less than stellar for them.

On the back of a very hot and dry summer, many viticulture regions in Spain and Italy have seen significant losses due to the worst drought in 30 years. Much of the Mediterranean was also plagued by record-breaking wild-fires in the scorching summer of 2012. It is estimated that Italy has not seen such a dismal crop since 1950. It is indeed tragic for our European counterparts.

Decanter also reports that the wine glut is almost over. According to Rabobank in The Netherlands, the demand-supply gap, caused by good crops in the years preceding the economic downturn of 2008 and the subsequent drop in demand because of it, is close to being closed. Global inventories of wine are reported to be at the lowest levels last seen a decade ago.

This coupled with a poor Chilean harvest in 2011 and recent reports coming out of Adelaide, that the Barossa Valley has seen significant frost damage during October cold-snaps; this may herald the season of the South African producer.

The UK supermarket chain, Booths and their wine-buyer, Andy Green, have already told The Telegraph that wine is already being actively sought from countries like South Africa. On the back of all the aforementioned, wine from Europe is becoming more expensive and wine is generally in short-supply. Something we have not experienced since the late 1990’s and early 2000’s.

China’s increased consumption, the growth of non-traditional markets, like Africa, plus the recovery of the United States economy, is contributing towards closing this supply-demand gap. Experts, according to The Telegraph, agree that wine prices could rise by a further 10% this year in the UK.

Currently, our growing season in South Africa has barely begun. It is often difficult to predict crop-yields this early in the season. However, the weather conditions at this juncture seem to be playing along with the South African producers. We have seen a relatively cool, benign spring with moderate winds and light rainfall. Winter was unusually, more on the wetter side of the scale, meaning drought conditions this summer are highly unlikely. The El Niño Southern Oscillation, the weather phenomenon which drives El Niño (Pacific-warming) and La Niña (Pacific-cooling) weather events, is also in stasis. This means our Southern African weather patterns should remain close to normal into 2013.

All the above factors could mean 2013 may be the year for the South African producer. If all predictions hold up, the weather cooperates, local producers play their cards right and wine-demand is anything to go by, we could be in for a great year. Although this comes off the back of some dismal crop news from Europe and some hiccups with our southern counterparts, South Africa’s wine industry seems to be mooted to fill the gap. If we can do this in 2013, hopefully we can show off our quality and win over some permanent new clientele; Keep them buying South African wine, even when crops in the northern  hemisphere improve.