Each year, late March into April can feel like a hinge point in the bulk-buying calendar. International buying generally enters a quieter phase while analysis is made of Q1 sales and future sales for the Northern Hemisphere summer are projected. Meanwhile, the size and quality of the Southern Hemisphere harvests, drawing to a close, are assessed to establish what will be available soon and at what price, while the early growing conditions in Europe are watched to establish what may be available later.
This period of deliberation feels even more pronounced this year, with COVID-19 uncertainty still pervasive. How the Northern Hemisphere’s 2021 summer will play out is unknown: will the better weather and the vaccination rollouts combine to enable some sense of normal summer life, with get-togethers, visits to the on-trade, holidays? Uncertainty is likely to encourage the continuation of the limited-risk strategy seen on many bulk markets over the past year: incremental, retail-driven buying covering only what is definitely required.
Argentina and Chile’s growing and picking seasons have been less warm, dry and sunny than normal. Argentina’s crop size appears to be in line with last year’s but Chile’s is proving harder to quantify. Australia and South Africa have received smooth growing seasons: the former expects a larger crop than normal, the latter a yield at least in line with the long-term average. The Northern Hemisphere growing season is underway, meanwhile, with spring’s advance in Europe dangerously stop-start. Indeed, at the start of April bud-break in France and Italy was struck by a severe and protracted frost wave; damage assessments are now being made. A dry winter and early spring in California have also put everyone on frost alert there until May.
In general, tight supply and firm bulk prices – or at least prices higher than they were 12 months ago – in California’s Central Valley and in Argentina and Chile have brought Australia and Spain more into play (primarily on reds) and also South Africa (primarily on whites). Australia finds itself long on reds now that China – by imposing a 218% import tariff on Australian wines – is no longer a viable market. Spain’s international varietals and especially its red generic wines are very competitively-priced. That said, demand has been strong and buyers are recommended to move sooner rather than later to secure the volumes they need at the best pricing. It is a similar picture on South Africa’s generic and international varietal whites – very competitive, negotiable pricing on some excellent-quality wine, but a marked uptick in wine shipments from Cape Town in recent months is a reminder that supply is finite.
Delays to shipping timetables and overseas container shortages have been issues raised by all our offices this month. This is a global problem, caused by a surge in demand for overseas goods from locked-down consumers with surplus money to spend combining with the kind of shipping uptick one might expect to see at the start of a global economic recovery. COVID-19 has also hindered port operations. Those shipping or expecting shipments are therefore recommended to allow for more time. In the meantime, read on for more on the global bulk wine and grape situation, don’t hesitate to get in touch directly for the very latest intel, and stay safe.