The value of Australian wine exports has continued to grow in the last 12 months up to June 2019, increasing by 4 per cent in value to $2.86 billion. China has welcomed this sustained growth with record numbers, increasing 7 per cent in value to $1.2 billion.
Export volumes decreased by 6 per cent to 801 million litres (89 million 9 litre case equivalents); this volume decline was driven by a decrease of 7 per cent in shipments below an average value of $2.50 per litre free on board (FOB*). This resulted in a 10 per cent increase in the overall average value of exported wine to $3.58 per litre, the highest level since 2009.
Wine Australia Chief Executive Officer Andreas Clark said the growth in value and the declines in volume at that lower end of the price spectrum was positive news to the sector that has been focusing strongly on growing value rather than volume.
Australia is well-placed in China. Looking at the first five months of 2019, Australia has become the number one imported wine category in mainland China by value. Despite the overall wine imports into China were down 22 per cent in volume, Australia’s imported market share has jumped 13 percentage points since 2015 to 24 per cent. Australia has consolidated its position as a key provider of premium and fine wines to the Chinese market.
Mr Clark said Australian wine exports to China (including Hong Kong and Macau) had reached a financial year record, increasing 7 per cent in value to $1.2 billion. Volume, however, decreased 16 per cent to 154 million litres (17 million 9-litre case equivalents) as exports of wines below $2.50 per litre FOB declined.
‘The strong growth in average value is positive for the wine sector and the broader economy as not only does it lifts returns for wine businesses and flows through to regional economies through higher grape prices. Our National Vintage Report 2019 released last week shows that the average grape price has lifted for the fifth year in a row, reaching $664 per tonne, the highest level since 2009’, Mr Clark said.
Figure 1: Market ranking by Australian wine export value
Mr Clark concludes by noting Australian wine supplies would remain tight in the medium term with last week’s National Vintage Report revealing that the 2019 vintage was 1.73 million tonnes, just one per cent below the 10-year average. This means that supplies, particularly of reds that dominate Australian exports will continue to remain stable.
Definitions:
• MAT is the Moving Annual Total of exports and refers to the 12 months ending with the nominated month.
• FOB is the ‘free on board’ value of the wine, where the point of valuation is where the goods are placed on board the international carrier, at the boarder of the exporting country. The FOB value includes production and other costs up until placement on the international carrier but excludes international insurance and transport costs.
