Situation and outlook for New Zealand agriculture and forestry (August 2007)
8 Wine
New Zealand wine prices are forecast to remain stable in international markets to the year ending 31 March 2008.
The world wine price outlook appears to be pessimistic in the medium term. The market segment targeted by New Zealand producers is growing much more rapidly than the world average is growing. New Zealand wine has successfully maintained its competitive advantage over the past 10 years. Given this historical performance, it is forecast that New Zealand wine prices will remain stable in international currencies, underpinned by a continuation of high-quality standards and the perception of New Zealand wine as unique and desirable.
Despite stable international prices for New Zealand wine, free on board prices are forecast to reduce in the year ending 31 March 2008 due to exchange rate changes. (See Table 8.1.)
Table 8.1: Wine export prices and volumes
| Actual | Forecast | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Year to 31 March | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | |
| Export volume (mil litres) | 29 | 46 | 57 | 72 | 85 | 100 | 109 | 116 | |
| FOB1 price ($/litre) | 9.9 | 8.7 | 8.5 | 9.2 | 9.1 | 9.6 | 10.3 | 10.6 | |
Note
1. Free on board – the value of the goods delivered to the port of export and loaded onto a vessel for transportation out of the country of origin.
Source New Zealand Winegrowers, Statistics New Zealand and MAF.
Exports
An increasing proportion of New Zealand’s wine production continues to be exported. In the year ended 31 March 2007, 72 million litres of wine were exported, up 26 percent on the previous year. Export volumes for the year ending 31 March 2008 are forecast to increase a further 18 percent, as, in part, red wine comes out of stock. (See Table 8.1.)
Export volumes of wine are forecast to significantly increase again in the year ending 31 March 2009, then increase at a slower rate in the following years to the year ending 31 March 2011. Wine is expected to overtake kiwifruit in terms of export earnings during the forecast period.
Wine marketsExport markets for New Zealand wine have diversified significantly in the past 10 years. In particular, reliance on the United Kingdom market has declined. It accounted for 65 percent of the volume of New Zealand’s wine exports in the year ended 31 March 1997 compared with 33 percent in the year ended 31 March 2007. |
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Figure 8.1: Wine export destinations by value, years ended 31 March 1997 and 2007 |
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Source Statistics New Zealand. |
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Production
Grape yields in the 2007 vintage were affected by frosts and cool late-spring and early-summer temperatures. The national figures mask regional variations, with yields well down in the South Island and Wairarapa and higher in the Hawkes Bay and Gisborne.
From 1999 the bearing area has increased by an average of almost 2000 hectares a year. The bearing area is forecast to continue to increase, although with some moderation in the rate of increase towards the end of the forecast period due to reduced prices arising from exchange rate pressures and the availability of suitable land.
VarietiesThe variety mix continues to be dominated by Sauvignon Blanc, which accounted for 40 percent of the bearing area in 2006. Pinot Noir (18 percent) and Chardonnay (17 percent) are the next most common varieties. The domination of these three varieties is expected to continue in the short term, with little change in the percentage represented by the minor varieties, although Pinot Gris is likely to have risen to 5 percent of the bearing area by 2009 from its current 3 percent. |
Contact for Enquiries
Manager
Monitoring and Evaluation
MAF Policy
PO Box 2526
Wellington
NEW ZEALAND
Phone: +64 4 894 0623
Fax: +64 4 894 0741
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