Deficient grape harvests 2007 worldwide: Brussels confirms, Italy worries, the U.S.A. anticipates

Europe has just officialised the forecasts of the fall of wine production in 2007. Italy has taken "anti-speculation"
measures. The French markets are gradually reacting ... Whereas Australians and Californians are already on the forecasts for 2008 and 2009.

The report published by CEVISE (Economic Committee of South-East Wines in France) on September 27th, informs us that the European Commission has confirmed the weakness in volume of the 2007 wine harvest, with 14 million hectolitres less than the average of the last 5 years on 27 countries of the Union, i.e. less 8 % of global volume. This loss of production is shared as follows: Hungary with - 18 % represents the most important loss, Portugal follows closely with - 17 %, Spain admits - 12 %, Greece loses - 11 %, Italy stabilizes at - 9 %, France minimizes the risk at - 5 %, whereas Germany improves with + 4 %, followed by Rumania + 11 %. (Source: DGADR on September 25th). Nevertheless, it is necessary to take account of the usual productions of each of these countries to have a real idea of the influence of this loss of volume. All the same, the European authorities confirm the general decrease in relation to the production of 2006. These declines are in the region of 4 to 5 million hectolitres for each of 3 big European producers: Italy, France and Spain. The forecasted world deficit should be important, around 18 million hectolitres (adding the 4 known for a long time in the southern hemisphere, and 1 or 2 in the course of confirmation in the U.S.A).

A situation which provokes a worrying risk of price increase

Indeed, the Italian Minister of Agriculture considers these price increases so "alarming" that he has already taken measures to fight against "speculation" and frauds, which would inevitably deteriorate the situation. The prices of white wines have already increased by at least 20 % in France, following the information diffused by the producers as from July, and rosé wines (home produce, and Côtes de Provence) are doing likewise, thanks to excellent quality on the whole of the Southeast, and to a particularly deficient harvest (-15 %) in the extreme Southeast (Var, Bouches du Rhone, and Alps of High Provence). For the moment, red wines are waiting to see clearer. But their foreign competitors anticipate "a negative impact on the available volumes, due to the difficult climatic conditions of 2007", according to wine professionals in California, interrogated by the University of Davis. But also they forecast "an increase of the profitability of the Californian wine production during the next 2 years". It must also be noted that Australia already announces a catastrophic harvest for next February, because of a southern winter that dried the ground, and especially did not fill any of the indispensable hydraulic dams in these vineyards (sources: WFA and WGGA, via Yahoo finance and Vitisphere).

Furthermore, except for the West of France, it is especially increasing drought and scorching heat that are announced for the coming years, conditions which are at the origin of the low results in 2007. The wine will be very good but more expensive, but that should not deter a good Epicurean.